thetorydiary: Pensions and retirement

Pensions and retirement

Tuesday, October 06, 2009

Conservatives eye £13bn saving by raising retirement age to 66

The newspapers are full this morning of the news that the Conservatives hope to save £13bn each and every year by raising the retirement age to 66 for men and sometime thereafter for women too. See FT report.

There were already plans to raise the age to 66 in 2026 but the Tories are bringing those plans forward by a decade because of the deficit crisis.

On this morning's Today programme David Cameron announced the appointment of a "strong independent" committee to examine exactly how the proposal would be implemented and, in particular, when the raising of the female retirement age would "sync" with the male retirement age.

The Tory leader defended the measures as a fiscal saving but also as a way of affording the relinkage of the basic state pension with earnings. The relinking was necessary, he said, for people to "retire with dignity".

George Osborne will set out more details on Tory deficit reduction plans at noon when he addresses the Manchester conference. ConservativeHome will live blog that speech.

Labour has been accused of attempting to steal the limelight from the Conservatives by leaking proposals to freeze the pay of judges, GPs and other senior public sector workers.

Tim Montgomerie

Posted at 08:45 in Pensions and retirement, Tax and spending | Permalink | Comments (103)

Saturday, October 03, 2009

Pensioners will keep their home and get free residential care if they pay £8,000 insurance fee under Tory plans

Tory plans to enable pensioners to avoid selling their home and still pay for long-term residential care are leading BBC bulletins today.

As the Daily Mail and most other newspapers report, the Conservatives are saying that pensioners will be able to pay an £8,000 insurance fee and in return will receive free residential care and will still be able to bequeath their home to their families.

Conservatives believe that the voluntary insurance scheme will be self-financing as only one-fifth of pensioners are likely to need the insured care and the average bill for pensioners who do go into care homes is about £50,000.

George Osborne explained the 'Home Protection Scheme' to Mail readers:

"It's a complete injustice in our society that 45,000 elderly people every year, who have worked hard and saved hard, are forced to sell their home and there's no affordable insurance. It is grossly unfair to those who are neither the richest, who can afford that care, and the poorest who get their care paid for. So we are going to help those people who have done the right thing through their lives and enable them to keep their home and pass it on to their children. 'It shows you can use the power of the state without adding to people's taxes.'"

Pensioners without assets equal to £23,000 will continue to receive free care.

Tim Montgomerie

11am Listen to Andrew Lansley explain the policy to Radio 4 listeners.

Posted at 08:20 in Pensions and retirement | Permalink | Comments (45)

Tuesday, September 22, 2009

David Cameron pledges to honour the restoration of the link between pensions and earnings

Oft-forgotten as one of the final major announcements of Iain Duncan Smith's tenure as party leader, the restoration of the link between the state pension and earnings will happen if David Cameron become Prime Minister.

According to the FT, the Tory leader has put paid to speculation that he might renege on the promise at a pensions summit today.

The paper's online report quotes Mr Cameron as saying:

“The reason it is affordable is because of the agreement that the parties came to over raising the state pension age progressively from 65 to 68. We have got to find huge savings in public spending. But there is a consensus, not just among the politicians, that at the heart of the pension system there should be a strong basic state pension, and that the spread of means-testing has gone too far. It would be a false economy to say we can’t increase the basic state pension.”

Jonathan Isaby

Posted at 16:49 in Pensions and retirement | Permalink | Comments (40)

Saturday, September 05, 2009

A Conservative Government would prioritise tackling the excesses of public sector pensions

The Telegraph reports this morning that over the next week it is embarking on a wide-ranging series on the Conservatives and here is part of today's offering:

The Conservatives would tear up gold-plated pension deals for highly paid public sector workers as part of a wider spending squeeze. The move is expected to lead a wider attack on lucrative final-salary pension schemes - which are now almost obsolete in the private sector - if David Cameron wins the election.
Mr Cameron and George Osborne, the shadow chancellor, are determined that the “pension apartheid” is tackled. Mr Osborne has drawn up plans to begin by looking at highly paid GPs. He has identified how some GPs “retire,” taking a full pension, only to be re-employed shortly afterwards as a consultant and incur new benefits.
A senior Tory source said: “It is clear that this sort of practice has got to stop and this is the area we will look to tackle initially.”

The report goes on to suggest that such proposals will "trigger an outcry" from the unions that would "test David Cameron's resolve".

Jonathan Isaby

Posted at 07:19 in Pensions and retirement, Tax and spending | Permalink | Comments (35)