UNISON Scotland Retired Members Information January 2011

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Provided by Mae Stewart, Editor UNISON Retired members Newsletter, Dundee, Perth and Angus. Please note that this is not definitive information about benefits but will provide a signpost as to where to get up to date information. Please check the sources first. UNISON Scotland can take no responsibility for information that may be outdated or inaccurate.

Issue 34 January 2011

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Pensions Changes in 2011

On 13 January 2011 the Government's new Pensions Bill received its first reading in Parliament. Here's a quick guide to what's been said, and what these changes could mean for you.

An increase in the State Pension Age

The first key reform in this Bill is the increase in the State Pension Age. The State Pension Age is different from, and not linked to the Default Retirement Age - it is the age at which eligible people begin to receive their state pensions.

How the changes will be brought through

Under the current rules, the State Pension Age for women is in the process of rising from 60 to 65 to equalise with men; and then state pension age for both men and women was due to increase from 65 to 66 between 2024 and 2026. The Pensions Bill is bringing forward the timing of equalisation and the rise in the State Pension Age from 65 to 66 for both men and women.

Pension Changes in 2011

Under the new legislation, women's state pension age will reach 65 by November 2018.
" The rise from 65 for both men and women will begin in December 2018 and reach 66 by April 2020.

Concern over those on lower incomes

Age UK is concerned that this change will hit the poorest hardest, as people on lower incomes are generally more reliant on their state pensions and have lower life expectancy.

Auto-enrolment

Better news is the new provisions about auto-enrolment. For the first time, all workers will have the right to a pension contribution from their employer unless they decide to opt out of the scheme. The new Government reviewed these plans and the Pensions Bill introduces some changes. Age UK is pleased that most of the provisions remain - for example, there will be no exemption for small firms, who will have to pay pension contributions for their employees. The Bill provides for an optional waiting period of up to three months before the employee is automatically enrolled.

Michelle Mitchell, Charity Director of Age UK, commented: 'Auto-enrolment is a hugely important reform which means that for the first time, all workers will have the right to a pension contribution from their employer unless they decide to opt out of the scheme. While we have some concerns about the increase in the threshold and the introduction of a waiting period, we are pleased that there will be no exemption for small firms.'

What happens now

Age UK will be working to ensure that the Government invests in providing good-quality information and advice to help people understand the new pensions options available to them and make informed decisions about saving for retirement. We believe that January 13's announcement brings both good and bad news for people in later life:

phasing out the Default Retirement Age is good for those that want to continue working past 65,
but plans to increase the State Pension Age more rapidly than previously planned is bad news for the millions of older people unable to work for longer.

Pensions Changes in 2011

The Pensions Bill, introduced today in Parliament, will bring forward the increase in the State Pension Age.
The Bill will see the State Pension Age for both men and women beginning to rise from 65 in December 2018 and reaching 66 by April 2020. This is significantly earlier than previously planned - the Pensions Act 2007 provided for the State Pension Age to rise to 66 between 2024 and 2026.
It is also earlier than promised by the Government's Coalition Agreement in May last year, which said that the State Pension Age would not begin to rise to 66 before 2016 for men and 2020 for women.
Other measures in the Pensions Bill include auto-enrolment of workers into pension schemes, ensuring that all workers will now have the right to pension contributions
from their employers, unless they decide to opt out. There will be no exemption for small firms.
Michelle Mitchell, Age UK Charity Director, commented: 'This Pensions Bill seeks to cut short the retirements of almost five million people by speeding up the planned rise in women's state pension age to 65 and bringing forward the increase to 66, six years earlier than planned by the previous government.'

Women and the poorest will be hit hard

Michelle Mitchell continued:

'Women will be hard hit by this change of policy, seeing their state pension age rise by six years between 2010 and 2020 compared to just one year for men. By pushing ahead with these plans, the government is breaking the promise it made in the coalition agreement not to start increasing state pension age to 66 for women before 2020.
'The poorest will be hardest hit by increases in state pension age as they are generally more reliant on their state pension and have lower life expectancy. Pensioner poverty in this country continues to be shamefully high yet this Bill fails to address the fundamental problems with our over-complicated and measly state pension system.' Better long-term saving needed to avoid crisis
Michelle Mitchell added: 'Any changes to the state pension age must be part of a more coherent government strategy to narrow health inequalities and end pensioner poverty once and for all. Further reform is needed which ensures a higher state pension and a simpler system.
'It is essential that the government now invests in providing good quality information and advice to help people understand the new options available to them and make informed decisions about saving for retirement. The benefits of long-term saving must be better communicated by the government if we are to avoid a future pensions crisis.'

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Keeping Healthy

Older people can help themselves avoid falling over by taking fewer medicines and by practising the Tai Chi martial art.

The advice, published in the Journal of American Geriatrics Society, is included in new guidance for doctors. Around 14,000 people die every year in the UK as a result of falling.

One in three over-65s and one in two over-80s will have a fall at least once a year. Falls are among the most common cause of death for older people. According to Age UK, services will be improved by implementing the journal's recommendations, which include doing regular exercise to increase strength and improve balance, such as practising Tai Chi.

The charity's Andrew Harrop said: 'Age UK welcomes these new guidelines which will help position the issue of falls amongst people in later life firmly in the spotlight. Every year, 3.4 million people over 65 suffer a fall that can cause serious injury, and even death.

'However, as these guidelines demonstrate, falls can be prevented. With research showing that programmes for improving strength and balance can reduce the risk of falls by as much as 55%, the recommendation that interventions for preventing falls should include an exercise component is particularly welcome. We urge that all exercise programmes are evidence-based.

'Currently there are large variations in the quality of falls-prevention services provided across the UK, and it is crucial that these guidelines are put into practice to ensure that future falls are prevented.

'The Age UK campaign Stop Falling: Start saving lives and money is calling on all those responsible to work together to improve access to falls-prevention services to all people in later life who are at risk of falling.

For more information, please visit www.ageuk.org.uk/fallscampaign'

For any advice on any issues which affect you please contact: Age UK Advice: 0800 169 6565

These excerpts were taken from Age UK. Apologies for any misquotes Mae Stewart

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