Yahoo Finance State pension should be scrapped for UK's richest pensioners, OECD urges
Britain should strip the state pension from the wealthiest people and spend the money saved on higher benefits for the poor, the OECD has said.
Slashing payments to the richest 5%-10% would free up money to help the poorest in UK society, the influential Paris-based think-tank – the Organisation for Economic Cooperation and Development (OECD) – said.
“Giving less [pension] to the people at the top would free up resources to increase general benefits,” Mark Pearson, the OECD’s deputy director of labour, employment and social affairs said.
His intervention, as reported in the Financial Times, comes as the triple lock on pensions emerges as a focal point of the general election campaign.
Prime Minister Theresa May dodged several chances in the last PMQs of parliament on Wednesday to say a Conservative government would guarantee the “triple lock” would be protected.
The lock sees pensioner benefits rise by inflation, average earnings, or 2.5%, whichever is higher.
Pearson told the FT that the UK, in line with many other nations, was facing pressure of an ageing population, living longer, and fewer people of working age.
“Faced with these pressures, are you going to ask people of working age to pay more, or people to work longer before they can claim their pension?” he asked.
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“…another way to ensure an adequate pension is to think about whether the pension should only be paid to those who really need it, to ease the tyranny of the maths.”
He said it was time to scrap the triple lock and focus increases on one factor only.
The most someone can get on a basic state pension is £6,359 a year, which is among the lowest rates in the OECD’s 35 member countries.
Britons need 30 years of National Insurance contributions to qualify for the full amount.
Labour leader Jeremy Corbyn says he will guarantee the triple lock, should he gain power.
Former pensions minister, Baroness Altmann, told BBC’s Newsnight that the lock was hindering future generations.
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“Keeping the triple lock will the pressure on the state pension age – pushing up the state pension age is unfair,” she said.
“Not only will they [young people] have to pay for the cost of the triple lock, they themselves will also end up with a higher state pension age.”
