Menu Menu

Lifetime ISA launch – BEWARE

5 April 2017

  • Launch of Lifetime ISAs – don’t be fooled
  • Hardly any providers offering LISAs – probably due to complexity and mis-selling risks
  • Mixing house purchase and pensions will damage ISA brand
  • LISAs may be good for first time buyers, but dreadful for retirement – saving for house deposit very different from long term investment for retirement
  • Trying to turn pensions into ISAs undermines young people’s pension prospects
  • Why not just improve the Help To Buy ISA and leave pensions alone?!

The new Lifetime ISA launches tomorrow. Thankfully, most providers have steered clear of it, they can see the dangers. Don’t be misled. If you want to buy a first home and are saving for a deposit, then the 25% Government bonus is a great deal. But using this as a pension has significant dangers you may not be aware of. Most providers are shunning Lifetime ISAs due to fears of mis-selling. They are right. This is a complex product which could leave millions of young people poorer in retirement. It has mis-buying and mis-selling risks written all over it! There is already much confusion and the Pensions and Lifetime Savings Association (PLSA) suggests many young people are considering opting out of their workplace pension to save in a LISA instead. That could undermine their future prosperity, so it is important to clarify some of the biggest issues.

  1. LISA gives you much less than workplace pensions: The 25% Government bonus is exactly the same as 20% pensions tax relief so you will not get any more money in a Lifetime ISA than you would in a pension. However, you will lose out on other money if you opt out of pensions and choose LISAs instead and you need to understand this before you decide.
  2. Pensions give you much more than just a 25% bonus: Workplace pensions can give you extra money from employer contributions, higher rate tax relief and National Insurance relief. This could be more than 100% bonus on your money, so pensions will usually give you far more than the Lifetime ISA on day one. It’s just that this is not properly explained when you get your pension statement, so most people don’t realise it.
  3. The 25% withdrawal charge is NOT just clawing back the 25% bonus. Many people do not realise how the LISA works and will believe they just lose the Government bonus. It’s much more than that.
  4. The LISA charges more than 6% penalty if you want your money back: If you put £4000 into a LISA and get the £1000 Government bonus but then want to take your money out again, the 25% withdrawal charge will be £1250 (and you will have to also pay charges for your LISA account too of course). That means you will get less than £3750. You will be charged more than £250 just to get your own money back – a large extra penalty.
  5. Mis-selling and mis-buying risks are clear – customers need advice: LISA providers may not clearly explain the risks of the large withdrawal penalties, and how much money young people will lose if they opt out of employer pensions. The FCA is trying to ensure risk warnings are given, but in reality the provider should check that customers have not opted out of workplace pensions, or have taken financial advice, so they have made efforts to check if a LISA is suitable for them.
  6. Saving for a house deposit in cash is fine, but cash is not suitable when investing for retirement over several decades: It is dangerous and misguided to conflate saving for a deposit on a first home, with investing over several decades for retirement. House purchase saving can be in cash, but long-term investing should be in growth assets and a broader spread of risks, including overseas investment, which would not really be suitable for a house deposit, but which can give better returns over time. Most ISAs are held in cash and, if pensions are turned into ISAs that are just put into cash accounts, young people are likely to be much poorer in later life.
  7. Serious risk of undermining the success of auto-enrolment: Pension coverage has spread to millions of new workers as employers have to put all staff earning above £10,000 a year into a pension scheme at work. But worrying PLSA research suggests many young people may opt out of their workplace pension, without realising how much they’d lose by doing so. Just as auto-enrolment is proving a success, along comes a new product to confuse things. It is not true that people don’t like pensions, auto-enrolment opt-out rates are really low, especially among the young. I am pleased that so few providers are offering this product because most young people will be better off in retirement if they use a pension.
  8. Behavioural nudges of Lifetime ISA are not suitable for retirement saving: The Lifetime ISA has behavioural features that make it far less suitable for retirement saving than a pension. Pensions are designed to fit with the principles of behavioural economics, while ISAs have perverse incentives.
  9. Pensions ensure more money goes in on day one. Auto-enrolment takes advantage of inertia as well as ensuring employers have to contribute too, so people have more money to begin with in pensions than in LISAs.
  10. Pensions are locked in until later life, while LISA does allow withdrawals. However, withdrawals face the stiff penalty of over 6%, leaving people with much less in their fund along the way.
  11. Pensions are taxable on withdrawals beyond the 25% tax-free lump sum in later life. This deters people from spending the money too soon, which is the right behavioural incentive. The incentive with a LISA will be to take all the money out around age 60, and have nothing left for your 80s – in other words, the features of the Lifetime ISA mean it is designed NOT to last a Lifetime.
  12. Pensions could even help pay for later life care. Pensions encourage people not to spend their money too quickly and, because they pass on free of inheritance tax, there is no need to worry about keeping it till much later life – so it could even help fund care needs if necessary. Young people will have much poorer retirement prospects with LISAs than pensions.
  13. Lifetime ISAs are great for the wealthy but will cost taxpayers an extra £1billion – is that money well spent? At a time when bereavement and child benefits are being cut, the LISA is going to cost an extra £1billion to the Treasury in the next few years. Two groups of people will most benefit from using a LISA for retirement saving. Firstly, wealthy under-40s who have already filled their pension allowances (perhaps they already have £1million of pensions or have contributed up to the £40,000 maximum into pensions). Secondly, non-earning relatives of wealthy people who have already put the maximum £3600 into a pension for them to get the tax relief and will now get a further taxpayer top-up for an extra £4000 for them. Is this a sensible use of taxpayer resources?

CONCLUSION: Lifetime ISAs should be abandoned. Stop confusing young people between retirement investment and saving for a house deposit – just reform the Help To Buy ISA and build on the success of auto-enrolment for pensions. The product is too complicated, will confuse customers and the last thing we need is another mis-selling scandal.

April 5, 2017   Leave a comment

Transferring Out Of ‘Guaranteed’ Employer Pensions Can Be A Good Idea

5 April 2017

Last night I attended an interesting event run by the Financial Times.  A large group of people came along to learn more about transferring out of Defined Benefit pension schemes.

It was an interesting session.  I thought it might be helpful to outline my views on this issue, as the conventional thinking is not necessarily fully reflective of new realities.  This is not meant to be giving anybody financial advice, this is about highlighting the important issues that need to be considered, understanding the questions you need to ask and the value of getting financial advice.  Whether or not to transfer out of a final salary-type scheme will depend on a complex array of factors that will be personal to each individual.  There are some rules of thumb that can be given, but even then it will be best to try to find a financial adviser to help you make sure you’ve considered all the vital issues.  I am trying to give a more balanced view here.

There are no absolutely right or wrong answers, but I certainly believe that the current regulatory attitude is out of date.  The FCA and the Pensions Regulator both insist that it will almost always be wrong to transfer out.   FCA guidance states ‘in most cases you are likely to be worse off if you transfer out of a defined benefit scheme, even if your employer gives you an incentive to leave’. (  This statement ignores the new realities and complex uncertainties of planning long-term income support in later life.

The benefits of a Defined Benefit pension may not be relevant to some people and, in fact, there are good reasons to consider transferring out.  That does not mean it will be right to actually transfer, but particularly with transfer values at such high levels, people may want to at least consider it because there are several potential advantages, particularly after the changes which have made Defined Contribution pensions far more user-friendly, tax efficient and effective for later life planning.  In the past, transferring out of a Defined Benefit scheme offered much lower values and people would often need to buy an annuity which represented worse value than their scheme benefits.  But in the new DC landscape, people have more flexibility and choice as to how to use their pension fund as best suits their circumstances.

People with a few DB pensions from previous employers, some paying quite small amounts of income, might benefit from transferring thousands of pounds from some of their DB schemes into a DC pension instead.  With transfer values having risen significantly, a pension of £20 a week could give £20,000 – £40,000 for a personal pension.  Those who are still working and have other secure pension income, could benefit from having the money in a DC scheme which can grow tax free and stay there for them until they are much older, perhaps even to help fund care or be passed on tax-free to loved ones.

Of course, Defined Benefit pensions do have advantages over Defined Contribution arrangements.  Here is a list of many of those advantages:

  1. DB schemes pay lifelong pension income – you can plan your lifestyle without worrying about market falls
  2. If you live to a ripe old age, your income should still carry on
  3. Even if the company in charge of your pension scheme fails, you are protected by the Pension Protection Fund (although the level of PPF benefits can fall in future if too many schemes fail)
  4. You don’t have to worry about what to do with your pension fund or how to get income, those decisions are made for you as the promised income (or PPF benefits) should just be paid to you for life
  5. You don’t have to worry about investment performance, that is taken care of by others
  6. Defined Benefit schemes also pay some pension to your spouse if you die first – and some will pay something to dependent children too
  7. Any pension income that relates to membership of a scheme since 1997 has to have some inflation protection (and some schemes do offer inflation protection before that too)
  8. Many people had part of their state pension in their final salary-type scheme and this is protected by extremely generous annual uprating every year until you reach pension age (unbelievably generous in many cases)
  9. Tax treatment for Lifetime allowance is more generous for DB than DC schemes


Why these advantages may not always be as brilliant as some people think

  1. If you are in poor health, you will not get much out of your employer scheme, whereas with money in a personal pension, you can pass the fund on tax-free
  2. If you are currently healthy but die soon after reaching pension age, you cannot pass any pension fund on – your pension dies with you as you have no ‘fund’
  3. If you are single, the spouse’s pension has no value to you
  4. A spouse’s pension is only a fraction of your full pension, usually half your previous pension
  5. If your pension relates to an employer you were with before 1997, you may have no inflation protection in your promised pension
  6. When you draw your pension income, if you are still working you will be taxed on it, possibly at higher rates, whereas if you have the money in a DC fund you can keep it tax free until needed
  7. Although the pension income should be guaranteed for life, there is a chance that your scheme will fail, and the income you were promised could be cut. This needs to be factored into your decision, especially if the employer sponsoring the scheme is in difficulties.
  8. If you have a very high level of income from your Defined Benefit pension scheme, it can be severely reduced by the PPF cap.
  9. PPF benefits could possibly be reduced in future if too many schemes fail (although at the moment the fund has been run very well and is in surplus so this currently seems unlikely.)


Potential advantages of transferring out of a DB scheme into a DC scheme

  1. If you die relatively young, you can pass on your pension fund to whoever you wish. If you die before age 75, it will pass on free of all tax, whether it is spent now or in future.  If you die after age 75, you can pass it on tax free and it stays tax-free until the person who inherits it takes money out.
  2. Your spouse can inherit your pension fund in full (rather than only a fraction of the income)
  3. If you have other guaranteed income, you may find a capital sum more useful
  4. You have ownership of an individual pension fund in your own name instead of an income entitlement that is either fixed, or rises by inflation or a small percentage each year
  5. You can be in control of your own investments and have a chance to grow your eventual pension
  6. Transfer values are at record highs, so you will receive a large sum of money if you transfer. For example, a small DB pension worth £500 a year for life, could actually give you a capital sum of £10,000 – £20,000 to put into a DC fund.  A DB pension that would pay £20 a week for life, could give you £20,000 – £40,000 capital sum to invest in a DC pension arrangement.
  7. If you have other pensions elsewhere, (many people have more than one DB pension from past employers), then transferring some smaller pension entitlements can give you a fund that you can invest for future growth, but can also be there to pass on to others or to support you if you become ill or die young.
  8. If you need money to pay for social care and especially if you have no other savings that could fund such expenditure, then having a pot of money in a tax-free DC pension could be a sensible way to build up a ‘care’ fund. One in four of us is likely to need thousands of pounds for social care in later life, but almost nobody has money set aside for that purpose.  Exchanging a small amount of lifelong pension income for a lump sum that can grow over the years to help with care costs can be a sensible choice for some.
  9. If you need to repay debts or a mortgage, you may benefit from using some of your DB funds even after paying tax – but make sure you get advice on how much tax you’d need to pay


Potential disadvantages of transferring out of a DB scheme into a DC scheme

  • You give up a lifelong income stream
  • You will have to pay fees on your DC pension fund which might reduce your future pension income
  • Your fund may have poor investment performance, so your future income may not be as high as the pension you gave up when you transferred
  • You will have to monitor your investments in a DC scheme for future years, whereas the DB pension is looked after by trustees and just paid out to you over regularly over time
  • You may find you go over the lifetime limit on DC pensions and have to pay tax – make sure you get advice on your tax position before deciding to transfer out


You really should get financial advice:

If your transfer value is worth over £30,000 you have to have an independent financial adviser to help you, but even for sums below that it is worth considering paying an adviser to help.  The decision is individual and will represent a complex balance of risks and potential benefits.

Here are some questions you need to think about and discuss with an adviser before making a decision – and don’t forget, once you’ve transferred out of a DB scheme, the decision is irreversible.

12 of the questions to consider before transferring from DB to DC:

  1. Is this just one of a number of pensions and I want to cash some in and leave the rest as income?
  2. Do I have other secure pension income?
  3. Am I in poor health and not expecting to draw the guaranteed pension income for very long?
  4. Am I still working and intending to keep on doing so?
  5. Will I pay higher rate tax on my pension income?
  6. Do I want to pass pension assets on tax free to the next generation if I don’t need them myself?
  7. What will I live on for the rest of my life?
  8. Do I need a guaranteed income for myself or a partner?
  9. Do I have other monies that could help fund care or might I want to use this?
  10. Do the DB pensions I have offer inflation protection (not all pensions accrued before 1997 will have inflation linking)
  11. Am I happy to pay fees and keep investing to grow my fund further in future?
  12. Do I understand the tax implications of transferring out (BEWARE, this is complex!)



Understand the issues before making any decision about transferring out of a DB scheme.  It may be right for you, especially if you’re in poor health, or you have other pensions, or are still working and want to benefit from future investment returns (accepting the risks and costs of course).  With current very high transfer values, (driven up by exceptionally low gilt yields following the Bank of England’s policies that have artificially depressed interest rates) many people are thinking about this.  There are advantages and disadvantages and a complex array of risks and benefits that you should consider for yourself.  Finally, make sure you get financial advice so you understand the tax and cost implications.

April 5, 2017   4 Comments

Cridland State Pension Age Review

23 March 2017

Cridland Report emphasises importance of working longer but shies away from allowing early State Pension for those who can’t

Summary of my views:

  • Yes it is important to help people work longer, especially after Brexit
  • Yes Government should end the triple lock which doesn’t protect oldest and poorest pensioners properly anyway
  • Yes we must tell people about any increases to their State Pension age
  • Yes adults caring for elderly relatives need more help
  •  BUT I would go further in recognising differential work history and life expectancy by allowing early access
  • Current system helps those who are healthy and wealthy enough to wait longer for State Pension, while giving nothing to those who genuinely cannot keep working


  • People under age 45 will get no state pension until age 68.
  • Just increasing state pension age prolongs disadvantage for occupations and regions with known lower life expectancy.
  • I hope this review will help pave the way to end the increasingly unfair triple lock.
Cridland is right to focus on helping people work longer, especially part time: I’m pleased to see the Review suggesting reforms such as later life training, mid-life career reviews and protection for carers, which I recommended as Business Champion for Older Workers. Retirement can be a process rather than an event, with people cutting down gradually rather than suddenly stopping and more help for people to stay in the labour market longer is important.

Brexit makes later working even more important:  We should not force people to stay on and should recognise the wide variations in life expectancy across occupations and UK regions, but as we leave the EU and immigration falls, it makes sense to use older workers’ talents and lifelong experience more.  This can boost the economy and their own future income.

But many people genuinely cannot keep working and State Pension currently doesn’t make allowance for this:  Cridland highlights the vast differences in life expectancy across the UK – more than 15 years differential.  Just as the Review recommends more flexibility is required by employers to facilitate part-time work for older people and help for the increasing numbers of workers who will need to care for elderly relatives, I believe more flexibility is also needed in the State Pension system.

Disappointing that Review decides against early access: People with shorter than average life expectancy generally still pay around a quarter of their salary in National Insurance. They may have worked for 50 years or more but may die before being eligible for any state pension – or may receive very little. This seems inequitable and their lower life expectancy is not recognised by our National Insurance rules. Normal insurance would usually charge lower premiums to such people but that does not happen. Therefore allowing early access could compensate for this even if for a reduced pension.

Current system only helps those who are healthy and wealthy enough to work longer:  If someone can work beyond state pension age, they can get a much larger pension but there is no help for people to get their state pension earlier if, for example, they started work exceptionally young, perhaps in tough industrial jobs, and genuinely cannot keep going till nearly 70.  Cridland recommends some means-tested help just one year before State Pension age but I think moving away from just one ever-increasing age, would be more socially equitable.  A band of starting ages, such as between 65 and 69 with adjusted payments would be fairer.

Spurious accuracy of ensuring receipt of State Pension for ‘up to one third of adult life’: The aim of the Review was meant to ensure people spent ‘up to one third of adult life’ receiving State Pension.  The Government Actuary’s Department figures vividly highlight the difficulties of such a vague target.  Tiny changes in average life expectancy are shown to imply vast differences in timing of state pension age increases.  Between 2012 and 2014, life expectancy fell a little, but that implied a 5-year change in the state pension age timetable.  It does seem that targeting 33.3% of ‘adult life’ or 32% of ‘adult life’ is misleading, given the sensitivity to tiny changes in mortality and huge differences in life expectancy across the population.  A range of ages would surely better cater for individual differences and allow some flexibility.

Problems for WASPI women show dangers of raising state pension age – lessons need to be learned: The Government also needs to learn from the women’s state pension age fiasco that it is essential to ensure people know about any state pension age changes in good time to prepare. Many older women are facing serious hardship as a result of Government failure to communicate with them and there has been no recognition of the damage this has caused so far.

Triple lock should be scrapped – it is a political construct that is increasingly unfair and leaves out oldest and poorest pensioners: I agree with Cridland that the triple lock should be abandoned after 2020. The triple lock is a political construct which purports to offer great protection while increasingly disadvantaging the oldest and poorest pensioners. The lock protects around £160 a week for the newest pensioners but only around £120 a week for older ones and it does not protect the Pension Credit at all which the poorest pensioners must rely on.  The arbitrary 2.5% figure has no economic or social rationale. Cridland suggests linking the State Pension just to earnings but I would like to see some protection against inflation too if that is rising faster.  There is a clear tradeoff between more generous pension increases and raising state pension age.  Having the triple lock in place also puts more upward pressure on the state pension age which itself disadvantages poorer areas of the country and those in heavy manual occupations. So the unfairness and extra cost of the triple lock make it ripe for reform.


March 23, 2017   2 Comments

Budget Comments

8 March 2017

Another missed opportunity to start addressing social care

  • No new incentives for social care savings and radical reform proposals pushed into Green Paper later this year
  • No proper help for savers – new NS&I bond pays interest rate lower than inflation, so savers lose money
  • Costs of public sector pensions will rise sharply, by nearly 40% between 2015 and 2020
  • Self employed bearing brunt of tax rises to pay for other measures

Addressing Social care crisis:

  • Extra £2billion for social care will help councils but may not be enough to ensure NHS pressures really relieved.
  • No new help or incentives for families to save for social care or use their ISAs and pensions.
  • More money for councils to cover costs of social care is good, but proper reform delayed – more money is just a sticking plaster on a weeping wound.
  • Will be a Green Paper later this year on radical structural long-term reform. That’s good but needs to be followed by urgent action as care system is breaking the NHS. Integration of health and care, helping families prepare for care costs, finding ways to recover extra money to pay for care – all these are essential as our population ages. The number of people over age 75 will increase by 2million in next 10 years.
  • No help for families to start saving for care – no incentives to help them save even though ‘death tax’ ruled out so can’t take money from their homes or estates.


Measures for savers

  • No new help for savers even as savings ratio reaches such low levels
  • New NS&I bond pays only 2.2% interest while inflation forecast to be 2.4% this year and 2.3% next year, so savers lose money in real terms each year


Helping people extend working lives

  • The Chancellor has announced £5million extra money for returnships for adults trying to get back into work. This is potentially good news for older people and other adults trying to return to work, especially helping many older women and carers who want to work after taking time out for caring. Of course, more is needed but this is a start. For example, if each returnship costs £250, this can help 20,000 people.


Pension matters

Pensions flexibility is raising far more money for Treasury than originally forecast.

  • Treasury expected pension flexibility to raise £0.3bn in 2015-16 and £0.6bn in 2016-17, but people have taken higher amounts out than previously forecast, so actual tax receipts were £1.5bn in 2015-16 and £1.1bn in 2016017. One cannot draw many conclusions from this as we do not know what the people who withdrew money will be doing with it – whether they have other pensions elsewhere and are repaying debts and so on. The Government needs to conduct some proper research into what people are doing when withdrawing pension money. Expected revenues from pension flexibility rules are expected to be £1.6bn in 2017-18 and £0.9bn in 2018-19. Again, we cannot draw firm conclusions without further information.


Costs of public sector pensions set to rise sharply.

  • The Budget figures list the costs of public sector pensions as follows. In 2015-16 the cost was £11.3bn but by next year that will have risen by over 20% to £13.7bn. By 2021-22, the cost is forecast to rise to £15.7bn, which is an increase of 39% over the 2015-16 level.
  • 2015-16 £11.3bn
  • 2016-17 £11.5b
  • 2017-18 £12.1bn
  • 2018-19 £13.7bn


Overseas pensions:

  • The Government is continuing its clampdown on overseas pensions. Anyone who wants to move their UK pension offshore into a ‘Qualifying Registered Overseas Pension Scheme’ (QROPS) will have to pay a 25% tax charge on the funds transferred, and also any payments made from the QROPS in the first five years after the money is transferred will be taxable in the UK.

March 8, 2017   1 Comment

Budget measures for social care

7 March 2017

Chancellor has chance to address one of biggest social issues of our time

  • Britain has been sleepwalking into a social care crisis – time to wake up!
  •  Elderly people who need care face wealth tax and stealth tax while others pay nothing
  • More favourable fiscal position offers opportunity to radically reform unfair care system
  • Integration and incentives long overdue – consider Care ISAs, employer care saving plans, auto-enrolment, eldercare vouchers, National Insurance


  • Dramatic unfairness in social care must be addressed
  • Huge focus on pensions, but nothing for pre-funding social care is betrayal of elderly
  • Social care for older people is pushing NHS to breaking point – and that’s before the baby boomers start needing care in coming years
  • NHS cannot keep picking up the pieces of our broken care system
  • Babyboomers will need care within next 20 years – huge demographic timebomb for younger taxpayers
  • Just giving councils more money is not the answer, that is a sticking plaster, but more radical reform needed too.

 There’s no single solution to care crisis – having been left so long it needs multiple approaches.The Chancellor faces a more favourable fiscal position than previously forecast and should seize the opportunity to address the social care crisis that is causing misery to many elderly people and engulfing the NHS.  Philip Hammond could be the first Chancellor to introduce long overdue reforms of the broken care system.  This should encompass both short- and longer-term policies, including proper integration of health and care, extending National Insurance and new tax incentives to help families prepare for care costs in advance by setting some of their savings or pensions aside, or saving specifically for care.  Signalling to families that millions of them will need some money in later life to pay for care needs, not just pensions, should have been done years ago, but successive Governments have failed to tell families to prepare for care.  Government spends billions on private pensions tax breaks, and the State Pension provides a base level of income support for older people, but millions of people will also need money for later life care costs too. Currently, they don’t know and neither Government, nor individuals, have set money aside.  The NHS is already at breaking point as it picks up the pieces of our broken care system, and that’s before huge numbers of baby boomers, now in their 60s, start needing care in future.  That’s where there may be a window of opportunity.  Babyboomers are often criticised for having better pensions, savings and other assets than younger people.  Of course, not all are well off, but the Government should encourage those that have assets to keep some of their wealth, pensions or savings for care in future.

Elderly people who need care face a wealth tax and an extra stealth tax to fund care:  Councils will only pay for care if people have less than £23,250 in assets, which could include the value of their house, unless they or their partner is still living there.  So families needing care face an effective wealth tax.  Those with no savings get care costs covered by council taxpayers, but those people who do have some assets have to pay for their own care.  But these same people are actually hit twice – and face a stealth tax, on top of this wealth tax.  Because of local authority cutbacks, councils are not paying enough to cover the costs of care for those who do get public funding, so those same people who must fund their own care not only have to pay for themselves, they also pay extra for the underspend on those funded by councils.  This is clearly unfair.  Radical reform is needed, giving councils extra resources can help short-term, but integrating the health and care systems is also required, to remove the artificial divide between health care and social care.  Taxpayers simply cannot afford to support increasing numbers of elderly people, but the money must come from somewhere.  Encouraging everyone to save for later life care, which one in four will need (and one in two of many couples), would signal that care costs must be planned for and incentivising such savings is vital in our aging population. The Chancellor should consider several reforms:

  • Special ISAs for Care Savings: Chancellor could introduce a new type of ISA to help people save for care and could encourage people to switch existing ISAs into new Care ISAs. These could perhaps get an added Government bonus if the money is earmarked specifically for care. This would be a far better use of taxpayer money than subsidising Lifetime ISAs as retirement saving.  This could encourage a maximum sum (perhaps up to £75,000) to be set aside, which could be passed on free of Inheritance Tax to form a Care Savings ISA for today’s older generations and then passed on to next generations if not used.  A ‘family care savings plan’ could help signal to families that Government won’t cover most care costs.
  • Allowing tax free pension withdrawals for care: Many baby-boomers have money in their pension funds and now have more freedom to leave their money invested, rather than buying an annuity. The Chancellor could allow tax-free withdrawals from pension funds if the money is spent on care, to encourage people to keep some back in case they need care.
  • Tax incentives for employers to help staff save for later life care or auto-enrolment: A pension is not the only money you may need in retirement. Encouraging employers to contribute to a care savings plan for their staff, with similar tax breaks to pensions, could help people build up funds for later life care. Care saving could also be incorporated into auto-enrolment in future.
  • ‘Eldercare’ vouchers to help staff with care costs: Employers could offer elder care vouchers (along the lines of childcare vouchers) which get tax relief as an employee benefit.
  • Stamp duty breaks when older people downsize their home: Government could help ‘last time buyers’ downsize their home. Perhaps with a one-time stamp duty exemption on last home purchase. This could free up some money that could be spent on care in future years.

I do hope the Chancellor will seize the opportunity to start addressing our social care crisis.

March 7, 2017   1 Comment

Despite advances in equality, there’s still huge gender divide in pensions and care

6 March 2017

  • International Women’s Day celebrates women’s progress but more to do
  • Too many women still losing out in pensions relative to men
  • National Insurance still penalises women – including in State Pensions
  • Lower lifetime earnings leave women with lower private pensions too – older women particularly at risk

Older women have achieved improved equality, pay and maternity rights for today’s younger women:  As we celebrate International Women’s Day on March 8th, spare a thought for current cohorts of women coming up to or just reaching retirement.  Throughout their lives, they have paved the way for younger women, as they fought for maternity rights and equal pay, as well as battling gender discrimination in other areas of the workplace.  Female employment conditions are vastly better nowadays than when the babyboomer women were starting out.

But women still losing out in both State and Private pensions:  There remains a significant – albeit narrowing – gender pay gap especially for older women, and one area where all women still lose out relative to men – and always have done – is in pensions.  Women are still very much the poor relations when it comes to pensions. Both for state pensions and private pensions, women’s prospects are worse than men’s.

Mums are supposed to get credit for State Pension when looking after young children:  Mothers who stay at home to look after their young children are supposed to be eligible for credit towards their State Pension, so they do not lose out while bringing up their family.

But new unfairness in National Insurance denies State Pension rights to many women:  In fact, brand new unfairness has recently been introduced into our National Insurance system that will penalise many younger women.  The recent decision to deny Child Benefit to families where one partner earns more than £60,000 has a little-known side-effect of stripping many middle class women of their State Pension entitlements.

Mothers have to claim Child Benefit even though they know they’re not entitled to it: The credit for State Pension is only automatically added to their National Insurance record when they claim Child Benefit.  Those mothers who know they are not eligible for Child Benefit because their family income is above the limit are actually supposed to apply for the benefit anyway, in order to get homecare credit for their State Pension.

If they don’t claim the Child Benefit they’re not entitled to, they can’t backdate it:  Firstly, it seems ludicrous to expect women to apply for a benefit they know they are not entitled to.  But more importantly, if these women discover that they have lost their State Pension credit, they cannot claim it later.  The new rules mean women can only backdate a claim for three months, otherwise that pension year is lost for ever.  If they have not claimed within the three month window and find out about this later, the Government does not allow them the credit.

Classic example of State Pension penalising women and not recognising their lives:  Clearly, the State Pension system is not designed with women in mind.  Women’s lives are different, due to their social and family roles and our pension system must make proper allowance for this.  It’s no use saying they will be credited and then preventing them from receiving the credits with new, complex rules.

Further injustice for low earning women who also get no National Insurance credit for State Pension and Government refuses to help:  There are other ways in which women lose out on their State Pension too.  The National Insurance rules penalise low earners and those with several low paid jobs.  These are predominantly women.  Mothers who stay at home to care for children can get credit to National Insurance.  Those who work part-time and earn more than £5824 a year but less than £8060 are also credited with a year on their National Insurance record, but do not actually have to pay National Insurance.  However, if they earn less than £5824 a year in one or more jobs, they get no credit for National Insurance at all.  The Government has known about this anomaly for years, and has refused to address it.  I tried, as Pensions Minister, to persuade the Treasury to at least allow these women to claim National Insurance credits, or to reduce the minimum earnings level to ensure that those women who are working are not treated worse than those who stay at home.  So far, Ministers have refused.  This is unacceptable.

More women are single nowadays so can’t rely on partner’s State Pension:  As increasing numbers of retired women are single or divorced, they have no husband’s pension to rely on and need their own pension.  So receiving less State Pension is of great concern, particularly as they also have much lower private pensions too.

Lower earnings, interrupted careers, caring duties mean less private pension:  As women are the prime carers for both children and adult loved ones, women’s lower lifetime earnings mean their private pensions are lower.  They are often left out of workplace pensions and have less income to devote to saving.

Auto-enrolment leaves out millions of women:  Even in the new auto-enrolment programme, far more women are left out of workplace pensions than men.  Anyone earning less than £10,000 a year (mostly women) does not have to be automatically enrolled into a pension and will not get the benefit of their employer contribution.  If they are in more than one job, but each pays below £10,000 they miss out altogether on the behavioural nudges that have been so successful in widening private pension coverage recently.  Low earners can request to be enrolled, but of course that is far less likely due to the very inertia that auto-enrolment is designed to overcome.

Older women faced short-notice changes in State Pension age that caused hardship:  Overall, the inequalities paint a bleak picture for women’s retirement income.  The Government also increased the state pension age for older women, giving many of them insufficient time to prepare.

Women continue to struggle to match men financially:  Between balancing their careers, looking after children and caring for elderly parents women are being squeezed from every angle.  Those in their 50s and 60s have particular difficulties, but younger women face penalties too.

Social care crisis disproportionately affects women:  The crisis in social care hits women hardest.  It is wives, daughters and sisters who usually bear the brunt of caring responsibilities, sacrificing their own income for the sake of their loved ones.  This leaves women less prepared to fund their own care needs and women are much more likely to live longer than men and be on their own, so will spend more money on care in later life than men.

Great strides have been made, but big divides remain:  Life in Britain today still leaves women worse off than men, particularly as they get older.  Although women have made enormous strides pushing through glass ceilings in the workplace, the gender pay gap remains and there is still a significant gender divide in pensions and care.  More progress is needed to reduce women’s disadvantages in 21st Century UK society.

March 6, 2017   2 Comments

Brilliant News – BHS Deal Helps 19,000 Members Get Better Pensions

28 February 2017

  • Well done to the Pensions Regulator – £360m deal to support BHS scheme
  • Members will get much more than PPF while Sir Philip pays up for future pensions
  • Regulator has worked hard to secure good structure for the deal as well as significant extra funding

I am delighted that the Pensions Regulator has managed to agree a deal with Sir Philip Green that secures over £360m for the BHS pension scheme and takes members back out of the Pension Protection Fund assessment.  Members should be better off than in the PPF and those with small amounts can choose to take a cash sum up to £18,000 and leave the scheme altogether.

What does this mean for BHS pension scheme?  This deal will bring an end to the uncertainty facing so many former BHS employees, who felt let down by their former owners and were worried about losing their pensions.  They will now be able to achieve more pension than in the PPF.

So what will happen to the pension scheme members? The members should be better off than if they had stayed in the Pension Protection Fund.  Their scheme has been in the ‘PPF Assessment Period’, which means all pensioners and anyone that has reached pension age since the company collapsed will have only been receiving the PPF level of benefits.  Under the new scheme, members will be taken out of the PPF Assessment and receive recompense for any underpayments during the past few months and then move onto the higher benefit levels of the new scheme.

What happens to the BHS pension scheme?  A new scheme is being set up that will run on outside the Pension Protection Fund, but will remain eligible for it and will still pay an insurance levy to the PPF.  The new scheme is expected to be very well funded, now that it will have access to over £360m from Sir Philip Green.  The new scheme will be run by three independent trustees, who have yet to be appointed and they will be responsible for its investments and for paying out the pensions to members.

Will all members go into the new scheme then?  Most members are likely to transfer to the new scheme.  Different categories of member will be in different positions.

  • Pensioners are all likely to transfer over to the new scheme, but if they do not do so, they will stay in the PPF and their payments will continue under PPF rules.
  • Members who are not yet at pension age are also likely to transfer, and will receive more than under the PPF.
  • Members with small pension entitlements under the scheme will be offered a cash transfer if they want it. Those who have pensions with a cash transfer value of up to £18,000, which is likely to reflect a pension income of under £10 a week, will be allowed to take their pension as a cash sum.  They will usually be best to transfer into a new Defined Contribution pension scheme and they can use the fund as they wish once they reach age 55, although keeping it for later life is usually most appropriate.

How will those who are thinking of taking the cash sum know what’s best for them?  The new scheme has provision for all these members to have access to independent financial advice, to help them assess whether they are better off keeping their money in the new scheme and taking a pension income, or transferring out.  For example, if they have plenty of other pension income, they may find the money more useful to them than a small pension, or if they want to pass on money to loved ones or are in poor health, they may feel the cash sum offers them a better option.

How is the new scheme better than the PPF?  In the PPF, members who were not yet pensioners would have their initial pensions reduced by around 10% and would lose all their inflation protection for years before 1997.  In the new scheme, all members will receive their full pension on day one, and will also receive a fixed inflation uplift of 1.8% a year for entitlements built up before 1997.  This is less than the indexation of the old scheme, but much better than the PPF would pay.  The PPF would also cap members’ pensions if they were entitled to large pensions.

Will the new scheme still be eligible for the PPF if it fails?  Yes, the terms of the deal ensure that the new scheme will still pay a levy to the PPF and will still be eligible to enter it in future if the scheme fails.  However, this is not expected to occur as the Regulator believes the extra money being paid to the scheme will leave it very well funded.

How much will the new scheme pay to the PPF each year in levies?  The new scheme may be the first one that will be assessed as a ‘stand-alone’ scheme under new calculations being consulted on by the Pension Protection Fund at the moment.  The PPF is currently consulting on a new levy methodology to reflect the fact that some schemes have no realistic sponsor but are still running on and managing their investment risks and returns to generate the pension payments required over time.

What happens to the Regulator’s investigations into the BHS former owners?  The inquiry into Sir Philip Green and his companies will now end, although there are further investigations into Dominic Chappell and Retail Acquisitions Limited.

Why is this such good news?  This really is a good news story.  I believe it is good for all concerned.

  • The members will get more money than they would have done under the PPF.
  • The Pensions Regulator has demonstrated that it has the power to force employers to pay significant extra sums if they failed to fund their schemes adequately.
  • It is good news for the PPF because the scheme will now no longer need to be supported by it.
  • It is good news for the pensions system because it sends a signal to employers that the Regulator has the power and the determination to pursue employers who underfund their pensions and hopefully it will encourage more employers to obtain Clearance before selling their pension scheme.
  • It is good news for Sir Philip Green as he no longer has the Pensions Regulator investigation hanging over him and has now kept his word to the Work and Pensions Select Committee about sorting out the pension.

It is good news for all pension schemes as it can also help to boost confidence in the regulatory system.

February 28, 2017   Leave a comment

State Pension Age and Triple Lock

28 February 2017

  • Triple lock will lead to extra unfair rises in State Pension Age
  •  Work and Pensions Select Committee is right to call for earnings and inflation link instead of triple lock
  •  Continually raising State Pension age disadvantages vulnerable older people
  •  Politicians hide behind triple lock but it does not protect pensioners properly anyway
  •  Keeping triple lock in future gives more money to better off and younger pensioners

Raising State Pension Age disadvantages vulnerable groups: Raising the state pension age entails significant unfairnesses that have been underplayed or under-recognised by policymakers. Recent furore over women’s State Pension Age increases highlights the problems this can cause. The state pension age has been increasing because of rises in average life expectancy, however there are huge variations in life expectancy across the country. Those who live in certain regions, people with heavy manual labour occupations, dangerous jobs or on low pay usually have lower life expectancy than the average, so it seems unfair to keep raising the age at which they can start taking their state pension, just because the ‘average person’ is living longer. There is no provision in the National Insurance pension system to recognise lower life expectancy or serious ill-health.

WPSC report suggests abandoning triple lock, so State Pension Age rises more slowly: The Work and Pensions Select Committee has commissioned an IFS report that identifies the problems caused by pressure from keeping the triple lock on State Pension Age rises. . I believe we have been increasing State Pension Age without thinking about more nuanced and fairer ways of managing the costs of National Insurance pensions and the WPSC report is a helpful addition to the debate.

Yes, Government must protect pensioners: Of course it is important to protect pensioner incomes. However, the triple lock is actually a political construct and fails to offer proper protection. It promises to increase just two parts of the hugely complicated State Pension so that they are guaranteed to rise in line with the highest of earnings, prices or 2.5% under the triple lock. There is no economic or social rationale for this system, the 2.5% is not related to any economic variables and is politically motivated. The longer the triple lock stays in place, the more disadvantaged those who are not covered will become and the greater the pressure to increase State Pension age even further.

Triple lock does not properly protect oldest and poorest pensioners: The only two elements covered by the triple lock are Basic State Pension (around £120pw and received by older pensioners) and the new State Pension (around £160pw but only available to the youngest pensioners). Therefore, the oldest and poorest pensioners are not properly protected. Pension Credit for the poorest pensioners is only linked to rises in earnings. The State Second Pension, Earnings Related State Pension, disability, war veterans’ and widows’ benefits, deferred increases and carers’ benefits are all only linked to rises in prices.

Triple lock has been used to cover up failures in other pension policy areas: Too often, when people complain to MPs about pension problems, the official reply is that the Government has the triple lock so it is unquestionably looking after pensioners properly. This is politically convenient but lazy policymaking and is not being honest with the population.

Keeping triple lock means higher State Pension Age rises which compound unfairness: The Work and Pensions Select Committee’s analysis, done by the respected Institute for Fiscal Studies, confirms that keeping the triple lock for future years after 2020 will cause unfair extra rises in State Pension Age. This is not the best way to manage pension policy in a country with large variations on life expectancy and work history.

 It’s time to consider better approaches to managing state pension costs than just keeping triple lock and increasing state pension age: Government must consider how to manage State Pension costs more fairly than just continually increasing the State Pension age, which unfairly penalises people with lower life expectancy and long working lives.

Consider other factors than just chronological age: Realising the inefficiency and unfairness of the triple lock, and the problems created by continually increasing state pension age, can help improve the operation of state pension policy in future. Those who are in poor health, have much lower life expectancy or have had very long working lives may need pensions sooner. Making them wait longer before they can get any money at all will feel unfair.

Consider contribution record and flexible age range: A fairer uprating system than the triple lock is needed, that does not penalise the older and poorer pensions. I hope the Cridland Review will be making recommendations in this area. For example, Government should consider perhaps extending the number of years of National Insurance required for a full State Pension, as well as more flexible range of ages than just one starting age. Such changes would help the more vulnerable groups more effectively than the current system.

February 28, 2017   1 Comment

Defined benefit pension schemes Green Paper

20 February 2017

  • DWP seems rather complacent about sustainability of UK Defined Benefit pension schemes
  • Nearly 90% of schemes are closed and Government needs proper planning for members in future years
  • Burdens of Defined Benefit schemes will increasingly put younger workers’ pensions and jobs at risk
  • Using annuity costs as a yardstick is unreasonable, unaffordable and unsustainable for most schemes

Complacency based on short-term view: The DWP has today produced its long awaited Green Paper on the affordability of Defined Benefit pension schemes. The document is a wide-ranging roundup of the issues impacting employers and pension scheme trustees in light of large deficits in most UK DB schemes. The overall tone of the paper is based on an assumption that there is no real crisis in pension affordability and that employers can generally afford the liabilities they are sponsoring. This complacency reflects short-term thinking, whereas this Green Paper should be an opportunity to plan for the longer term outcomes for members of such schemes.

Government should be planning for medium-term risks now as schemes in run-off: From a medium-term perspective, it is clear that the Government needs to put plans in place to manage the run-off of Defined Benefit pension schemes. Nearly 90% of all schemes are now closed to new members, more are closing all the time and once the scheme has closed to new members, it is effectively in run-off. It is only a matter of time before it closes to new accruals too. If we wind forward a few years, it is clear that fewer and fewer workers will actually be in these pension schemes and employers will be sitting on a legacy liability that has nothing to do with their business at all. It relates to people who will no longer be working for them and they will have little or no business interest in supporting the scheme. This will entail greater risks to the PPF. Any period of economic weakness is bound to lead to greater sponsor insolvency and we should be planning for such problems now, as it will take some time before arrangements can be agreed and established. Ongoing support for DB schemes will increasingly damage younger workers’ pensions and job prospects.

Younger workers’ pensions and job prospects damaged: The ongoing Defined Benefit pension schemes will also increasingly make workforce rewards inequitable, with the older, longer-serving workers who may still be in the DB scheme having far better pension benefits than the younger, newer employees who will have DC pensions with lower contributions. The Green Paper suggests the cost of pension accrual for a typical UK DB scheme has risen from around 24% of salary in 2009, to around 50% of salary in 2016. Average contributions to DC schemes are nowhere near these levels. The greater the cost of supporting the legacy DB scheme, the lower the resource potentially available to pay into younger, newer workers’ DC schemes. This is bound to lead to tension, with employers looking for ways of removing responsibility for these legacy liabilities. It is highly likely that employers will simply not be willing to support such schemes in the longer term, so a plan is required for managing the pension payments in the longer term.

Consolidation is one solution that makes sense: Establishing a Central Discontinuance Fund or ‘SuperFund’ that can pool many schemes together, reduce running costs and take advantage of more diversified asset allocation would cut costs and enhance potential benefits. Local Authority schemes are already being required to merge their investment allocations – such models could be used for private sector schemes in future too.

Broader asset allocation is still needed – Myners Review called for this in 2000!: The Green Paper is right to call for broader asset allocation strategies and greater exposure to alternative asset classes. It is rather ironic to see this discussed today, in light of the fact that I first wrote about this when helping set up the Myners Review for the Treasury in 2000. Pension changes seem to take an inordinately long time.

Relaxation of annuity requirements would help: The Green Paper does not sufficiently explore the need to relax the requirement for schemes to buy out benefit in the annuity market. Annuity purchase is punitively expensive for most schemes, the current interest rate environment had increased the costs significantly and there is simply not enough volume in the annuity market for all schemes to buyout anyway. It is time to set up an alternative self-sufficiency regime, that does not require annuity purchase.

Overall, the Green Paper will generate useful debate, but the need for action is greater than suggested by this paper. Many employers are struggling with DB scheme costs and as we leave the EU, British businesses will have many other issues to deal with. A system that helps them manage legacy liabilities is needed for the coming years.

February 20, 2017   1 Comment

Help people use pensions and savings to fund social care

8 February 2017

  • Care crisis is worse than pensions crisis – but pensions and savings could help fund social care
  • Many baby boomers have pensions and ISAs but no incentive to retain money for care
  • Chancellor’s Budget could consider tax-free pension withdrawals and IHT-free ISAs for care savings
  • Such incentives would let people know they need to prepare for care costs  
  • Have to get real about the scale of care challenge – need combination of public funding, national insurance, private savings and integration with healthcare

The UK crisis in social care is potentially far worse than the pensions crisis:  Both issues are a function of our aging population, which is a good news story.  But, because successive Governments have failed to properly prepare, it is turning into a disaster.

No money aside to cover the inevitable costs of aging:  There is no money at Government level – it’s all left to cash-strapped councils who cannot cope.  There is no money at private level either, because most people have not seriously considered this issue, wrongly assuming the NHS will look after them or their loved ones.  This is short-sighted policymaking at its worst.

Advanced old age usually entails extra spending: With increasing numbers of much older people in this country, it is inevitable that more money will be needed to look after them in later life.  This should be no surprise.  An aging population is bound to need money for this but so far all the Government incentives and preparation for later life income have revolved around pensions, with nothing to pay for care.

Current cohort of older people is small, but will rise sharply in coming years:  The fact that the social care system is so poorly understood and that there are no incentives to help people plan for such costs just in case it is needed, has led to a complete lack of preparedness.  The cohort of older people needing care now is actually relatively small, but in 20 years or so the huge demographic bulge of baby boomers will increasingly need looking after as they reach their 80s.

Pensions could be adapted to help fund care:  However, pension income is not designed to cover the extra costs of care.  Nevertheless, pensions could be adapted to provide some help, as could other savings products, with a little extra incentive from the Treasury.   There is an opportunity to encourage baby boomers to set money aside in advance, in case they need care.

Millions of older people do have pensions and savings but they may spend them soon:  Of course, the majority of older people are not hugely wealthy but millions do have savings and pensions built up over the years.  The pensions crisis for future retirees is being addressed, belatedly, with a reformed state pension and auto-enrolment.  But for today’s sixty-somethings there is much more to be done.  With the new flexible pensions landscape, there is an opportunity to encourage them to keep some capital sums for later life, rather than planning to spend them straight away – and indeed for those who have ISAs, it is important to encourage them to consider keeping some of those funds unspent as a ‘Care Fund’ in case they need it.

New incentives in the Budget urgently needed to help fund care:  But an important part of the mix should be new incentives to encourage people to use their pensions and savings for care.  Here are some suggestions for the Chancellor.

Allow people to take money out of their pension funds tax-free if they use it for care:  Doing this would give people a further incentive not to spend all their pension fund too soon.  If they have money in their pension, but don’t think about using it for care, then by the time they need care the money may all be gone.  Signalling the importance of not exhausting pension funds too quickly would give an additional behavioural incentive for people to leave money aside in their tax-free pension wrapper as a potential ‘care fund’.  If they don’t actually need it, then the fund passes to their loved ones tax free, so it could form a care fund for a partner too.  Care costs are much higher for women than for men, because they live longer.  With a traditional pension, widows do not receive a capital sum to help them fund care and, under the old pension rules, once their husband had bought an annuity (the vast majority of which were single life) the pension died when they did.  Even if they had a joint life annuity, the widow only inherited a part of the income and no capital sum.  With the new freedoms, if the husband keeps money in his pension fund and does not spend it all on care for himself, the money will be available to his widow for her care if needed.

Relax the regulatory attitudes to transferring money out of Defined Benefit pensions: The current regulatory attitude strongly discourages transferring money out of Defined Benefit final salary-type pensions into a Defined Contribution (DC) arrangement.  This should be relaxed.  With the new freedoms for DC pensions, there could be many people who would benefit from such transfers.  Giving up a relatively small, guaranteed pension income might be the optimal decision for a family, particularly if they have other pension income and this is just one smaller deferred pension that will not make a dramatic difference to their lifestyle.  As an example, a £50 a week final salary-type pension could be worth around £100,000 as a transfer value.  If a husband and wife were to take a transfer of this size into a Defined Contribution pension, they may not miss the £50 a week, but they could hugely benefit from the £100,000 fund in coming years to help pay for care.  Transferring small deferred pensions can both help pre-fund care costs -and the surviving partner can inherit that sum in full, rather than just receiving a fraction of their deceased partner’s pension if it were still in the DB scheme.

Introduce special ISA rules for Care ISA funds – free of Inheritance tax:  Many older people already have ISA savings, but they do not think of retaining that money until much later life, as a potential ‘care fund’ to help them pay for care.  Some will spend the money on holidays, new cars, house refurbishment or for other needs but if there was a clear reason not to spend it, then there could be more money set aside for care within families.  Earmarking some of their ISAs for care, in a newly-created ‘Care ISA’ environment, could benefit many people in years to come.  The Chancellor could consider allowing people to transfer some of their existing ISAs into a ‘Care ISA’, or could allow an additional ISA allowance for care.  Indeed, the money currently spent on the Lifetime ISA as a 25% bonus would be much better spent on incentivising saving for later life care.

There is no one silver bullet that will solve the care crisis: A crisis is already upon us and there is no one magic solution.  However, a range of measures, when added together, can at least make a start in preparing the nation for care.  Savings incentives need to be part of the mix.  In addition, broader reforms could include a national insurance system to improve publicly available funding.  Better integration of health care and social care is also urgently needed, so that older people’s needs are specifically addressed in the most cost-effective way, instead of being artificially separated between wholly inadequate council funding and hugely expensive NHS care.  This could include keeping small local hospitals open as ‘convalescent homes’ where older people can be safely discharged and encouraging GPs to ‘prescribe’ preventive measures such as homecare, handrails, telehealth or personal alarms.  Funding for meals-on-wheels could be restored and better information and advice for families whose loved ones need looking after could alleviate some of the pressures too.

Government must get real about the scale of the challenge:  I urge the Government to act swiftly on this issue.  The system is already in crisis and is much more difficult to solve than the pensions crisis.  With pensions, ultimately, the Government has decided to make people wait longer and to pay them less.  Such options are not realistic for care.  Once people need care, you cannot make them wait longer without causing harm.  And we are already forcing people to accept less care, which is part of the crisis.  Now is the time for action, no more waiting and hoping.  One mark of a decent society is how it treats its older, vulnerable people.  We must not fail our aging population.

February 8, 2017   2 Comments