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- Author or Editor: Marilyn Howard x
Parliamentary Questions is a selection of recent written questions from MPs to government ministers in the House of Commons. The answers highlighted in this section focus on social security matters which may be of general interest to readers. Published in daily and weekly editions of Hansard, questions and answers across a range of issues can also now be found online at www.publications.parliament.uk/pa/cm/cmhansrd.htm.
Parliamentary Questions is a selection of recent written questions from MPs to government ministers in the House of Commons. The answers highlighted in this section focus on social security matters which may be of general interest to readers. Published in daily and weekly editions of Hansard, questions and answers across a range of issues can also now be found online at www.publications.parliament.uk/pa/cm/ cmhansrd.htm.
Disability is a complex and contested issue, often with tensions between policy approaches of ‘benefits’ and ‘rights’, that is, benefits as compensation for exclusion rather than civil rights to enable inclusion (Daniel, 1998). These intersect with different models of disability (medical, social and transactional: Howard, 2003). Traditionally, the medical model has been the ‘moral basis’ for benefits (SSAC, 1997), although increasingly the social model is accepted (Prime Minister’s Strategy Unit, 2005). Over eight years of New Labour, disability policy has drawn on several models – often implicitly.
Parliamentary Questions is a selection of recent written questions from MPs to government ministers in the House of Commons. The answers highlighted in this section focus on social security matters which may be of general interest to readers. Published in daily and weekly editions of Hansard, questions and answers across a range of issues can also now be found online at www.publications.parliament.uk/pa/cm/cmhansrd.htm.
Parliamentary Questions is a selection of recent written questions from MPs to government ministers in the House of Commons. The answers highlighted in this section focus on social security matters which may be of general interest to readers. Published in daily and weekly editions of Hansard, questions and answers across a range of issues can also now be found online at www.publications.parliament.uk/pa/cm/cmhansrd.htm.
Over the last three decades Britain has witnessed an unprecedented rise in the number of people receiving welfare benefits that has provoked fears of a growing underclass and mass welfare dependency.
The making of a welfare class? provides the first comprehensive analysis of the reasons for this growth and subjects notions of welfare dependency and the underclass to empirical test. It focuses on four principal groups of benefit recipients - children and families, retirement pensioners, disabled people, and unemployed people - and, using important new evidence, explores the relative importance of economic, demographic, institutional and normative factors in the pattern of growth.
The book addresses a phenomenon - growth in benefit recipiency - which is common to all advanced industrial countries and nowhere well understood. As a central focus of government policy and a key development in modern society, the issues explored in the book will therefore be of interest to academics and policy commentators alike.
Written in an accessible style and assuming no prior knowledge, with succinct chapters, elegant summaries and extensive use of graphics, complex arguments appear simple. A comprehensive glossary of technical terms is included. As a result, The making of a welfare class? is compulsory reading for undergraduates and postgraduate students of sociology, social policy and economics and anyone else interested in the development of modern British society and welfare policy.
British pension provision, featuring low National Insurance pensions, helps to create two nations in old age, one characterised by low incomes and means-tested supplementation, the other by relative affluence due to income from occupational pensions.
However, pension reforms enacted until 1978 served to enhance the level and coverage of state provision, leading each new generation of pensioners to be better provided for than earlier ones.
Greater coverage of improved occupational pensions increased average incomes and reduced the need for means testing but created greater income inequality among pensioners.
British pension provision has long been recognised to generate two nations in old age. One comprises people who enjoy continuous prosperous employment and reach retirement with a full state pension and typically also an occupational or personal pension. The second ‘nation’ includes people who have never worked and those who have had a history of low-paid and intermittent work, and as a consequence need to rely on means-tested supplementation in old age. The image of two nations remains apt, despite various policy developments over the years. Indeed, on occasion, policy changes have tended to reinforce inequalities in old age, with those in secure employment benefiting most from improved pension provisions.
The intention in this chapter is to explore the institutional factors that have forged these two nations: the availability and coverage of the different kinds of pension and the impact of this on pensioners’ incomes and on their need to seek means-tested supplementation. Each of these issues is considered in turn. Doing so provides a partial explanation for the division between people arriving in old age with a portfolio of pension provision and those who do not and, hence, of the relative size of the two nations in old age.
There has rarely been political consensus on pension policy, but consistent public support for retaining state pension provision has probably helped to protect the incomes of the current generation of pensioners.
People often have limited understanding of how pensions work, lack advice and fail to engage in lifetime financial planning.
Occupational pensions tend first to be acquired by people when aged in either their twenties or their 40s (typically too late).
Retirement has been taking place earlier, although early retirement is frequently not planned long in advance.
Take-up of means-tested benefits is thought to be lower than for other pensions, and may actually have fallen since the 1970s.
This chapter is divided into two parts of disparate length. The first is the shorter, and briefly reviews public attitudes towards state provision of retirement pensions, while the latter considers peoples’ responses to planning for their own pensions. The two topics may be reflexive. Support for state provision is strong, if tinged with scepticism about the government’s commitment to maintaining generous pensions, while apathy and lack of forward planning typically characterise individuals’ approaches to ensuring financial security in old age. Both perspectives have helped to shape the current pattern of provision.
It was apparent in Chapter 23 that pension policy in Britain has always been subject to continual review and revision. For seven decades policy sought to provide increasing financial support for ever larger numbers of pensioners within the constraints of financial probity. While Beveridge hoped to implement a fully-funded state pension scheme, political pressure demanded full benefits to be paid ahead of time.
Pensioners’ incomes, and their claim on social security provision, are largely determined by experiences in the labour market and the financial return on investments. However, the processes involved operate on a historic time-scale.
Half of early retirements appear to be voluntary, but ill-health has been an increasing factor.
People with occupational pensions are more likely than others to retire early, but the decision to retire may be usurped by employers who impose compulsory retirement ages or offer severance packages.
The lower incomes of older pensioners are largely the result of earlier generations missing out on the higher earnings and better pension arrangements available to later generations.
In recent times, and over comparatively short periods, the depletion of assets and depreciation of pension income has not had a large effect on pensioners’ living standards nor, therefore, on claims for benefit.
The effect of the economy and economic processes on the size of the pensioner population is likely to be less immediate than in the case of unemployment or even disability. The financial resources that people bring into retirement are clearly in part a function of the economic conditions that prevailed at various times throughout their working lives. Whether they were able to find and sustain employment; whether they were able to save and the level of return on those savings; whether they were able to join an occupational pension scheme; and the state of the financial markets on the date of retirement – are all dependent on the pattern of economic growth and development that accompanied their age cohort.
Demography – specifically enhanced life expectancy – explains the 44% growth in the pensioner caseload.
Enhanced state benefits – notably SERPS, which ironically has now been abandoned – and the maturation and greater coverage of occupational pensions account for the fall in the numbers of pensioners claiming means-tested supplementation.
Means-tested caseloads would have been even smaller had not housing policy driven up rents. They would be greater if universal take-up had been achieved.
Despite the success of past pension reforms income inequalities forged in the labour market tend still to be largely repeated in old age.
What were the principal factors leading to the 44% growth in the number of pensioners receiving retirement pensions between 1971 and 1998, and the fall in the proportion receiving means-tested supplementation? The main story is quite straightforward, although again further work would be required to place precise figures on the size of the effects (Figure 26.1).
Demographic change is the main driving factor accounting for the increased number of retirement pensioners. Despite falling birth rates and smaller birth cohorts in the early years of the century, the numbers reaching retirement age have actually increased over the last 26 years. Life expectancy after retirement has also risen, by about one fifth for men and one seventh for women, over the same period. It would appear from existing analysis that the increase in the Retirement Pension population was driven slightly more by the larger number retiring than by improved longevity after retirement. Net in-migration is likely to account for little more than 1% of the increase.
