Tag Archives: pensions

Nick Clegg’s Letter from the Leader: “Steve Webb’s pension reforms are a great step forward”

Europe might have been the focus for much of the commentariat this week, but there’s no doubt what’s been the most significant domestic news: the Coalition’s reforms of the state pension. And it’s that issue — and Steve Webb’s contribution to it — which is the focus of Nick Clegg’s latest letter: ‘you can tell that Steve Webb has delivered a pension change that makes it worthwhile to save, and simple to prepare for retirement.’

It’s not often (ever?) you’ll find the Lib Dem leader and the Daily Mail’s Quentin Letts on the same page: their admiration for the pensions minister is the exception to the rule.

lib dems pensionsThe party has produced three infographics that are easy to share via Facebook. Nick’s letter doesn’t link to them, or thank the hundreds who’ve already shared the news of this Lib Dem success in government with their friends — so here are the links for those who want to tell their friends of Steve Webb’s success:

libdem letter from nick clegg

This week I want to tell you about my good friend and colleague, Professor Steve Webb.

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Steve Webb MP writes… A truly radical pensions reform

As LDV readers will no doubt be aware, this year marks the 105th birthday of the 1908 Old-Age Pensions Act. Through this Act, Lloyd George introduced the first state pension to Britain, providing 5 shillings (£0.25) a week for those over 70. Fast forward nearly forty years to another great Liberal, William Beveridge, and the National Insurance Act of 1946 that gave birth to the modern state pension. Beveridge’s original idea was for a single, simple, decent state pension, paid after a lifetime of National Insurance Contributions and not subject to a means-test.

Beveridge’s principles have been subject to a sort …

Posted in Op-eds | Also tagged | 28 Comments

Danny Alexander fronts… a Liberal Democrat policy

Danny Alexander sometimes attracts a bit of criticism from party members for the number of times he’s done media appearances where he’s ended up spending much of the time defending Coalition policies which are predominantly Conservative. So good to see him out in the TV studios this morning fronting up a policy that the Liberal Democrats have strongly pushed for – and thereby emphasising the Liberal Democrat contribution:

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Next week in the Lords: 8-11 January

Whilst rumours of a list of new Peers swirls around the Palace of Westminster, the Lords returns to work on Tuesday, and a somewhat lop-sided week continues through to Friday in order to fit in the postponed debate on Leveson.
 
Never let it be said though that the Lords needs a gentle warm-up before asking the difficult questions. Tuesday sees oral questions on airport capacity in London, housebuilding in South East England and the effect of the ‘fiscal cliff’ solution on the UK economy, before the Growth and Infrastructure …

Posted in News and Parliament | Also tagged , , and | 1 Comment

Opinion: Pensions for property scheme is profoundly flawed and illiberal

One can just imagine the proposed pension for property scheme (which Nick Clegg has announced) being the product of committee thinking, for, typical of the produce of many committees, it tries to cram all of the trendier topics of the day into one proposal, resulting in something which is less than the sum of its parts.

The current scheme, the product presumably of the Liberal Democrats’ desire to create popular policies which differentiate us from the Tories among the voters of middle

Posted in Op-eds | Also tagged | 20 Comments

Calling them granny taxes doesn’t mean they’re unfair

The phasing out of the additional personal allowance was decried as a ‘granny tax’ but that move did not go far enough. A new CentreForum report looks at two unjustified and deeply regressive age-related tax breaks: the tax-free lump sum and the exemption from National Insurance.

There are many lonely, vulnerable and poor pensioners who need support. But it’s insulting to suggest that everyone over 60 or 65 can be lumped into the category of frail granny (to say nothing of grandpas!). There is a huge range of incomes amongst pensioners. At the very top, the average annual pension …

Posted in News and Op-eds | Also tagged and | 20 Comments

LibLink: Steve Webb – I will not hesitate to take action on pension charges

Steve Webb writes in The Telegraph:

Almost 11 million of the adult population are not saving enough for retirement. So if millions of people are not going to get a nasty shock when they retire we need some big changes in the world of pensions. …So what is the truth about pension scheme charges, and what is the Government doing to make sure that people get

Posted in LibLink | Also tagged | 5 Comments

Liberal Democrats deliver fair pensions for women

So, here it is in the Guardian, the paper that’s been so critical of the Coalition in general and the Lib Dems in particular, these past two years. The announcement that many of us have wanted to see for as long as we’ve been politically active. That women who take time out of the labour market to care for children or sick relatives will not be penalised in their old age.

This is an example of the Coalition delivering a major benefit to mainly women.  And although it’s Iain Duncan Smith who’s quoted in the article, make no mistake, it’s Liberal …

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Opinion: Civil Service strike – the follow up

“Once more unto the breach” goes the rallying call from my Union Reps as we prepare to strike on May 10 2012. Following up the N30 strike on public sector pensions which I have written about previously on this blog, I issued an alternative rallying call – to get round the table and negotiate. But unsurprisingly ignored.

I find myself weirdly ambivalent this time. I shouldn’t be. It is fundamentally about funding my life throughout retirement and yet, the approach taken by the union since the previous strike does not do anybody any favours.

The three tests for me are: Do we …

Posted in Op-eds | Also tagged | 10 Comments

Opinion: The pensions crisis

The Department for Work and Pensions warns that many final salary schemes have already closed down and those that survive will be closed to new entrants within six years.

The average defined contribution pot – the pension now replacing the more generous final salary scheme – is £26,000. At current rates, this fund would buy a Joint life 50%, 3% escalation annuity of less than £1000 per year.

One in six people retiring this year have not saved into a private pension or accumulated other assets, so will see their salaries replaced with the state pension only.

To provide for a pension in …

Posted in Op-eds | 32 Comments

Opinion: What do Charity tax and higher rate pension relief have in common?

We have seen much furore over the effects that a restriction on the level of higher rate tax relief for charitable deductions may have on philanthropy. Nine out of ten charities are opposed to such a move and warn that large donations could reduce by as much as 20%. In the Lib Dem 2010 manifesto, we proposed reforming gift aid to operate at a single rate of 23%, giving more money to charity while closing down a loophole for higher rate taxpayers.

The 2010 manifesto also proposed giving tax …

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Andrew Stunell MP writes… Launching the Liberal Democrats’ local election campaign

Local Election Day is now exactly a month away for most of Metropolitan England as well as across the whole of Scotland and Wales. Nick Clegg was in my own area of Stockport earlier today to officially launch the Liberal Democrat local election campaign, visiting a local business and speaking with councillors, business owners and local people.

I’ve no doubt that many of you have been out on the doorstep over the last few months, talking to people and showing them what we are achieving both nationally and locally.

You will already have your big messages in place. Number one has got …

Posted in Local government | Also tagged , , , , and | 8 Comments

Stephen Lloyd MP writes… £140 a week for every pensioner – sound familiar?

There’s no need to adjust your screens, it is true; we’re on the way to introducing a flat rate pension for all of £140 a week. You might be thinking you’ve heard this before; well you’re not wrong, except in opposition we used to call it the ‘Citizens Pension’.

We are on the verge of delivering on another key manifesto promise after the Chancellor announced in yesterday’s budget the coalition’s intention to give pensioners £140 a week. While this morning’s headlines are heavily slanted to the reduction of the 50% tax rate, and the ‘granny tax’, nestled away inside …

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Labour’s hypocrisy on the ‘Granny Tax’

The response from Labour and the tabloids to yesterday’s Budget have majored on the patronisingly termed ‘Granny Tax’.

However Ed Balls and colleagues must be delighted that so far everyone seems to have missed that the last Government froze the Age Allowance between 2009-11 – or as Shadow Chief Secretary to the Treasury Rachel Reeves would term it Labour imposed ‘an enormous stealth tax for older people’.

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Danny Alexander MP writes… Liberal Democrat budget victory for “further faster” tax campaign

Over 20 million working people will be better off next year after Liberal Democrats in the Coalition Government delivered the biggest ever increase in the income tax personal allowance in the Budget.

The increase of £1,100 is worth £220 to 21 million working people – taking the total income tax cut for working people delivered over 3 years by the coalition to nearly £550 a year. Two million people will pay no income tax at all. By going ‘further and faster’ as Nick Clegg promised, we’re getting real help to millions of hard-pressed people at a time when they need …

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Public sector pensions: what you find if you ask the obvious question

In the debates over public sector pensions, it has been very common to have figures quoted that are supposed to show how low public sector pensions are on average. In better coverage this sometimes results in some juggling about of means and medians so that the ‘average’ quoted is more meaningful. What is usually lacking, however, is the answer to the obvious question: how many years work has someone put in to get that apparently low average pension?

Talking about how much pension someone gets without talking about how many years they work is odd, to put it mildly. For example, …

Posted in News | 27 Comments

Please can we stop raising tax out of people’s pensions?

Reading my Spring Conference papers, I saw with interest the motion F7 “Making Tax Fairer”. Would we be doing something to simplify Britain’s massively over-complicated tax system, I thought? Might we be proposing something really radical like linking the personal allowance to the minimum wage or something to address the way people earning much less than the 50% top rate of £150,000 can pay much higher effective rates of tax, more than 50% – sometimes more than 60% – because of withdrawal of tax credits and then Labour’s inequitable withdrawal of the personal allowance?

No, I’m afraid we’re not doing any of those things..

Posted in Op-eds | Also tagged | 18 Comments

LibLink: James Plunkett – Budget 2012: 20 minutes in, 1-0 Team Clegg

Over at the New Statesman, James Plunkett, who is leading the Resolution Foundation’s Commission on Living standards, looks at what we’ve learned from the recent interventions by Nick Clegg (pushing for a £10k income tax threshold to help the lowest-paid) and Danny Alexander (urging this be paid for by ending higher-rate pension relief) — and what those interventions might mean for George Osborne’s budget this March…

If there’s one thing Alexander’s intervention confirms it’s this: the key question for the 2012 Budget is no longer whether the Lib Dems will get anything on personal allowances but how the next

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Danny Alexander: it’s time to axe higher-rate tax relief on pensions to fund tax-cuts for lowest-paid

A couple of weeks ago, Nick Clegg signalled his determination to cut the taxes of the lowest-paid — now Lib Dem chief secretary to the treasury Danny Alexander is pressing for the tax-rise that would enable the Coalition to get on with it.

Here’s how the Telegraph reports it:

Danny Alexander, a Liberal Democrat Cabinet minister, says the better-off are receiving overly-generous tax relief when they invest money for their retirement. Mr Alexander’s proposals would see tax relief halve from 40 per cent to 20 per cent. He also wants workers on the minimum wage, who earn up to

Posted in News | Also tagged and | 8 Comments

Opinion: both private and public sector pensions need improving

There are two fundamental problems with the analysis by the Institute for Fiscal Studies of the current negotiations on public sector pensions.

Firstly, the IFS compares public sector pension provision with that of the private sector and implies that the inevitable disparity has to be rebalanced by cutting the public sector rather than improving private sector provision.

Secondly, they choose to ignore the approximately £100 billion saved by moving from RPI to CPI and then says that if you exclude £100 billion and the fact that retired public sector workers’ pensions are going to have lower increases than before, they are better off.

But this …

Posted in Op-eds | Also tagged | 14 Comments

Opinion: Tackling Labour’s Pensions Deficit

The Coalition Government is currently coming under fire for cutting public sector pensions, but the truth is that pensions funding was cut 13 years ago by Gordon Brown when he launched his raid on pension schemes.

Until the last Labour Government came into office the accrual of interest on pension funds was not taxed — pension schemes could build up funds more quickly than other modes of investment in order to pay out benefits when members retired. Labour changed that and taxed interest on pension investments as it accrued; pension schemes which had aimed at paying out a …

Posted in Op-eds | 6 Comments

Tim Farron’s Christmas message

Well that was quite a year, wasn’t it? It was a good one too!

I know, I know, after the referendum and the horrible results in May you’d be forgiven for believing we were sinking faster than Blackburn Rovers (how it pains me to write that), but you know what, it’s not true.

This year we did some amazing things, things you and I have wanted to do for years but never had the power to actually get done.

For one, we put an end to the horrific practice of locking up innocent kids behind bars for months on end in immigration …

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Liberal Democrat members back pension changes but opposing making strikes harder

Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 564 party members responded, and we are publishing the full results here over several days.

According to our latest survey of paid-up party members, Liberal Democrats want to see major changes to pension arrangements in the UK. Nearly three-quarters want to see universal benefits such as free television licenses and bus passes replaced with means-testing so that the wealthiest pensioners do not receive the same benefits as everyone else.

There is also strong support …

Posted in LDV Members poll | 20 Comments

Opinion: Wednesday’s strikes – A Lib Dem trade unionist’s perspective

So, why am I striking?

The government is continuing to persist in their unaffordable and unsustainable claims. The Hutton interim report published in October 2010 stated that as a percentage of GDP, the cost of public sector pensions will go from 1.9% to 1.7% by 2030 due to the reforms that happened in 2006 under the previous Government.

The government is deliberately being less than honest over the true impact of the pensions changes in order to meet their pre-election rhetoric. This is nothing more than playing games with people’s retirement plans.

The government is not negotiating. They are using classic bully-boy playground …

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LibLink | Steve Webb fears poor rap for pensions

FTAdvisor.com reports:

Steve Webb MP has raised fears about pensions’ poor image and how low interest rates and quantitative easing have damaged annuities. The Pensions Minister, who said the government is going to use employers to promote pensions and auto-enrolment, described auto-enrolment as being like a Ming vase – “very precious, but very fragile”.

He added he wants to change perceptions and instil confidence in retirement planning to ensure that charges are not too high and that pensions offer value for money. He said: “We need to move from a system that’s fiendishly complicated, that still leaves millions of pensioners living in poverty, to one, ideally, where we have a single, simple, decent state pension on which people can build.” …

He also said quantitative easing has damaged pensions. When asked about concerns over annuity risk given low interest rates and quantitative easing, the Minister admitted to “an issue about volatility, not knowing what you are going to get and an issue about poor returns.”

You can see Steve’s interview with Saga’s Director-General Ros Altmann below:

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Opinion: How we’ve been going wrong for the last 20 years

Social mobility means more than whether people are in the same income group as their parents. It also means that the lives of people “below” look more like those “above” them as time goes on.

Most of the twentieth century saw a clear demarcation between blue and white collar workers. Blue collar workers were paid less, and their lives were much less secure. They were more likely to be on short-term contracts – labourers were often hired by the day. Their work involved a greater risk of injury, and thus loss of work. They were less likely to have unemployment insurance and a company pension. The employment conditions for white collar workers were much more reliable – and that, as much as the difference in income, meant that white collar workers were able to buy a house, giving them a security not enjoyed by blue collar workers.

Posted in Op-eds | Also tagged | 17 Comments

The most striking statistic from Liberal Democrat conference

Steve Webb, speaking to Lib Dem conference:

I found out that I was, indeed, the 11th different pensions minister in the last 14 years.

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Steve Webb’s speech to the Liberal Democrat conference

The other day, someone came up to me and said:

“Steve, you’re an above-average pensions minister!”

In a world where praise can be a bit hard to come by, I took that as a compliment.

But he quickly said:

“No, I didn’t mean that you’re good at your job, I meant you’ve survived longer than most pension ministers!”

And when I inquired, I found out that I was, indeed, the 11th different pensions minister in the last 14 years.

So it is hardly suprising that pensions policy has been a bit piecemeal and messy over the years.

Every change with the best of intentions, but put it …

Posted in Conference | Also tagged | 5 Comments

Opinion: Trade unions, pensions and Labour

I have been following very closely the pensions dispute as it unfolds and one of my concerns is public sector workers could lose a lot of pay through strike action in what I am starting to believe is a political strike which they cannot possibly win.

I am also a little surprised at the way the government have handled things so far and, as a former national union representative, I have been amazed at times by their ineptitude.

Further confirmation I am afraid that the Tories and sadly many in our party don’t understand the real world of industrial relations.

So why do …

Posted in Op-eds | Also tagged , and | 56 Comments

Opinion: Why today’s strike action is wrong

Today in England and Wales, tens of thousands of public sector workers, many of them teachers, are expected to strike. Currently public sector workers largely enjoy more generous pensions than their equivalents in the private sector and the Coalition Government has acknowledged the growing difference in approach between the private and public sectors. The private sector long ago realised the rising cost and substantial risk involved in offering final salary schemes, based on years of service and end of career earnings, made them unsustainable.

The Coalition Government has a responsibility to ensure that pensions in the civil service are both fair …

Posted in Op-eds | Also tagged and | 31 Comments
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