Liberal Democrat leader Charles Kennedy has come out with a pension blueprint, which he said is sure to remove all pensioners out of poverty. It would, however, delay the official retirement age to 67, which would be implemented only in a span of 25 years.
Known as the Citizen's Pension, it would be worth £109.45 a week if current prices are taken into account and would be a third higher than basic state pension of £82.05 which is now being given, according to Mr. Kennedy. Also, the plan would include those who had lived in the UK for a period of at least 20 years and would not be based on national insurance contributions.
He asked the MPs to set an example by reforming public sector pensions which would demonstrate their willingness to reform their own scheme. This would mean that MPs, who currently receive one 40th of their final salaries for every year of service, would be
receiving one 60th of their salaries which is on par with other public sector employees.
Mr. Kennedy said the plan would help women in particular, who under the present system are losing out since they may have taken more breaks from working than males.
As per his plans, which were outlined at the party's London HQ, the value of the Citizen's Pension would rise proportionately with average earnings instead of price inflation, which is a long-standing request.
The Liberal Democrats had promised a "citizen's pension" to all citizens over the age of 75 before this year's general election. The latest plan has been amended to include it to all people over 65.
Other proposals include scrapping of second pension and savings credit, employees need not be forced into taking company pension schemes and starting of a new pension scheme for persons drawing low incomes
Mr Kennedy said: "We have one of the lowest state pensions in the developed world, and one of the most complex systems. Women, in particular, suffer real discrimination. I believe that there is now a broad consensus that we need a state pension that is universal - a Citizen's Pension."
The Liberal Democrats also want a review so as implement changes in public sector pensions to ensure that they are affordable in the long term.
The Conservatives said they wanted to have a look at the report before arriving at conclusions, but the party has rejected previous versions of the Liberal Democrat’s citizen's pensions schemes on the grounds that they were "unworkable". They proposed a scheme which suggests a system of credits for people who are unable to work as they tend to their children or sick relative instead of UK residency factor.
Posted
on : Tue, 22 Nov 2005 16:15 GMT | Pensions News
By : Paula Jenkins
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