THE UK state pension is only worth 28.4% of average income at retirement making it the worst state pension in the developed world. The value of pensions across the EU is more than double that offered by the UK Government.

For generations the UK Government has kept pensions deliberately low to force people to buy private pensions, boosting the city of London, whilst individuals who cannot afford private pensions are being forced into pensioner poverty. In London and the Southeast where wages are highest and the UK economy grows much more quickly due to the emphasis on financialisation, by and in large private pensions are far more affordable to people. However, in Scotland, Wales, Northern Ireland and northern English regions, the former industrial heartlands, people have experienced higher unemployment, lower wage growth and lower investment. As such, more and more people cannot afford private pensions and must exist on the state pension of £137.60 a week.

There is poverty and inequality in London and the southeast. A failure to enforce the real living wage and pay workers a fair wage that allows them to live with dignity and not get ensnared in a lifelong debt trap is a key driver for that inequality. The London effect – financial and London centric economic policy – has drained opportunity, investment, brainpower and young people out of the UK regions and sent manufacturing abroad creating an economic half-life, a zombie economy. Yet those that live in areas that are not afforded the same economic progression opportunities are expected to be able to purchase private pension assets when they can’t even feed their families without payday loans despite often holding down full-time jobs. Often the very people that during the pandemic we have started to refer to as essential workers.

Inflation is returning due to the twin effects of the pandemic and the additional costs of importing caused by Brexit, significantly lowering the spending power of the underpaid masses. There are also 690,000 carers in Scotland including 29,000 young carers under the age of 18, how are those people supposed to afford private pensions? If those carers did not exist, the cost of the care they provide to the public finances would be over ten billion a year – I’d rather we just said thanks and provided for them properly in old age.

The Scottish Government has been pushing the Real Living Wage and has increased carers allowance but having its power limited to tinkering to mitigate London’s damaging neo-conservative economic hoarding policy is not enough.

An Independent Scotland Must Prioritise Pensioner Wellbeing

The SNP’s Social Justice and Fairness Commission set a goal for all Scottish pensioners to receive £179.60 a week in an independent Scotland – a rise of £42.00 a week on the basic state pension. If you retire now, you will receive £179.60 a week from the UK state pension but almost all pensioners receive only £137.60 a week that’s not enough to live on neither is £179.60 but many of those carers (who are mostly female) will not have paid enough National Insurance Contributions to even guarantee the full/paltry state pension. The SNP simply agreeing to offer the new state pension to older pensioners as well as those newly retired does not address the inequality and unfairness at the heart of the UK pensions system, it wouldn’t even lift the UK out of the position of the worst state pension in Europe.

Let’s be clear – the UK is a wealthy nation but it deliberately follows economic policies that create inequality and so we do not have a wealthy population as a whole. There will always be individual circumstances and hardships, but rich countries should not operate economic systems that create poor people. Scotland is an even wealthier nation than the UK, but UK government policy will not allow us to have a wealthy population.

Believe in Scotland is campaigning for the state pension to be raised to £200 a week immediately upon independence which would then be followed by staged gradual increases as independence allows Scotland’s economy and finances to thrive until Scottish pensioner poverty is eradicated altogether. This is part of our wellbeing led economic approach.

How could we afford this? Well, we can’t afford not to. A total of 75% of the economy is based upon consumer spending and as more and more people reach retirement age, if 40% of them can’t afford to be economically active then the economy collapses. If you increase the state pension then pensioners will spend it in local shops, buying new clothes, more food, presents for grandkids and go out more often. Thus, injecting that money straight back into local economies, creating more jobs in local shops and businesses and generating VAT giving the state 20% back quickly. The velocity of money is the speed at which money changes hands in an economy and drives economic growth. Pensioners create velocity through spending as opposed to tax cuts to investors which takes money out of the real economy, slowing growth and driving inequality.

Sure, offering stability to pensioners has the potential to significantly add to the Yes vote but that’s not the reason for doing this. It is simply the case that people who reach pensionable age but were not afforded the opportunity to save enough for retirement should be able to live with dignity in old age and this should be a starting point for Scotland’s pensions policy ambitions. It’s the right thing to do.