Pensions - Articles - House of Lords Intergenerational Fairness report


Commenting on the report from the House of Lords on intergenerational fairness Steven Cameron, Pensions Director at Aegon said:

 “As the age profile and distribution of wealth of our population continues to change, it's critical that all government policies are considered through a lens of intergenerational fairness.

 “The state pension triple lock has served its purpose of boosting the level of state pensions faster than average earnings but continuing it indefinitely is not financially sustainable.

 “For younger people, considering their default employment status as 'worker' is a helpful protection and should come with employee benefits such as auto enrolment into a pension.

 “Perhaps the greatest intergenerational challenge of all is how to find a fair and sustainable means of funding social care. The Government is still to deliver on its commitment to revisit this and looking at potential solutions across the age spectrum will be essential.

 “With the Baby Boomer generation now above age 55 and increasingly in retirement, it's right to consider if blanket benefits for older generations remain appropriate or if the cost of funding these is falling disproportionately on younger workers.

 “The average income of a pensioner couple is now £454 a week* which means that incomes are now around 70% of non-retired households. This represents a huge change over recent decades and the stereotype of retirement as a time of constant thrift is largely outdated. Pensioner incomes have steadily risen as a result of factors like the provision of defined benefit pensions, increases in the state pension and strong performance of property prices and investments.

 “However, while pensioners are on average better off this hides big discrepancies and across the country there are still many older people who struggle with fixed costs like heating bills. Some universal benefits like a free TV licence for wealthy pensioners do look hard to justify but the government should proceed with caution when it comes to reform of areas like the state pension. Some of the factors that have boosted pensioner incomes in recent years like defined benefit pension provision will not last forever as employers increasingly switch to less generous alternatives and any change could have significant consequences in the years to come.”

 *https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790535/pensioners-incomes-series-2017-18-report.pdf

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