Tag Archives: pensions

Pensions

Posted by Euan Bennet on 23/09/2013

Today the Scottish Government published a paper on their plans for pensions in an independent Scotland. No doubt the media will provide context and mature, sensible analysis of this document and communicate properly to the public that pensions will be safer and better under independence. But just in case they don’t, here is a link to the document itself:

The Scottish Government’s pensions paper

Headline points include:

  • The amount spent in Scotland on ‘social protection’, which includes pensions and other welfare spending, is lower in percentage of public spending and as a share of GDP than in the UK.
  • In 2011-12, social protection accounted for 38% of Scottish public spending, but 42% of UK public spending.
  • In GDP terms, in the same year social protection spending was 14.4% of GDP in Scotland, but 15.9% of GDP in the UK.
  • While all Western nations face the challenge of ageing populations, Scotland is actually projected to have a lower percentage of pensioners and hence a lower number of ‘dependents’ than the UK and many other comparable nations.
  • This is mainly due to lower life expectancy in Scotland, which is something else we’d like to address.

To establish a baseline for considering the likelihood of pensions getting better or worse, we must first recognise that the UK state pension is the second worst for both men and women of all EU member states. It is estimated that 13.2 million people of working age are not saving adequately for their future.

It’s a long and quite boring report, but helpfully Annex A (page 103) summarises the proposals and compares them to the status quo. There are 30 such proposals, all of which say some variation of “will stay the same or get better” (for example by proposing the “Triple Lock” – pensions rise by whichever is highest out of average wage, inflation, or 2.5% – until 2020 in the first instance where Westminster has only guaranteed it until 2015). Don’t just take my word for it though – take a moment to see for yourself! I would encourage anyone who is concerned about the pensions situation after independence to at least look at the preamble and Chapter 1, and Annex A.

 

Update 03/10/2013: Wings over Scotland have posted an image of Annex A to save wading through 100-odd pages to get to the interesting bit.