For publication in the Stirling Observer, 14 November 2018

By Bruce Crawford MSP


The UK Chancellor’s Budget has rightly been criticised on a number of fronts. From a failure to fix the broken Universal Credit system, to, in particular, a refusal to guarantee fairness for women born in the 1950s. These are women who will have to work for up to six years more than they previously thought they would have been required to before they get their State Pension.


This has brought about a terrible injustice for a generation of women across the UK – known as WASPI women.


However, the conversation about UK State Pensions also has to be broadened to compare it to what other developed countries are doing for retired citizens.


Stats from the OECD (Organisation for Economic Cooperation and Development) shows that the UK has the lowest State Pension of any developed country. The average for other OECD countries is 63%, with the Netherlands and Italy seeing State Pensions provided to their citizens worth over 80% of their average wage earnings. Their study calculated that a worker in the UK will receive just 29% of what they had previously been earning through the state pension and other benefits.


There can be no doubt that this has been a contributory factor towards serious retirement-age poverty in the UK. As a result, the UK has one of the highest rates of private pension savings in the world – worth around 95% of the wealth of the country (GDP).


In countries where the State Pension is much higher, people don’t have to put as much of their own earnings aside. In France and Germany, for example, private pension savings are worth less than 10% of their GDP.


However, even with the top up of private pensions, the average retirement income for the UK is still less than the OECD average – at around 60% of former working-age earnings. In contrast, the total earnings for retirees in India, Turkey and the Netherlands is around 100% of former career earnings, and retired citizens in Croatia earn nearly 130% of what they used to.


So why is the UK lagging so far behind? Some might argue that successive UK Governments have relied too much on people making contributions towards private pensions. This has resulted in an ever-widening gap emerging. This is particularly true when considering the number of people who are simply unable to give up part of their monthly pay for a pension pot.  One stark example of this can be the case can be found in the number of people earning less-than the real Living Wage – which recent data estimates is just over a fifth of the UK’s population.


Those who have nothing to fall back on by the time they retire are expected by the State to survive on £164.35 per week, or just over £8,500 a year – as per current full State Pension rates.


This is simply not enough to support a suitable standard of living. As a society, we should want to support our citizens in their retirement years. We should thank them for all they have contributed and enable them to enjoy life as much as possible. State Pensions are entirely reserved to Westminster and successive UK Governments have continued to let our older generations down.


Surely it would be better for Scotland to have the ability to make these decisions. Not just to set the rate of a State Pension, but control over all of the levers on our economy to support it and to fund it properly. Like we have done with the powers we have had devolved to us over welfare, let’s all fight for a future on State Pensions that has fairness, dignity and respect at the very heart of what we do.