Just incase the older generation (HI MAW AND DAD) are worried about their pensions. WHAT WOULD INDEPENDENCE MEAN FOR MY STATE PENSION AND CREDITS? Question: What would independence mean for my State Pension and Credits? Answer: The Scottish Government has published its detailed proposals for pensions in an independent Scotland, including the state pension and related benefits. These can be found in a paper called Pensions in an Independent Scotland as well as in the white paper Scotlands Future: Your Guide to an Independent Scotland. Acknowledging the importance of continuity for our older people, the proposals guarantee that state pensions and credits will continue to be paid as now, on time and in full. The UK Pensions Minister, Steve Webb, has acknowledged that our older people would be entitled to current levels of state pension in an independent Scotland. Similarly, the UK Department for Work and Pensions has confirmed in writing that independence will have no effect on your State Pension and you will continue to receive it just as you do at present: In addition, a Yes vote creates the possibility of important immediate improvements. Key points include: The possibility of a lower retirement age Protection of pensions and guarantee credit with a triple lock Savings credit protected through independence Better protection for spouses As we see below, many of these rights and opportunities would be lost without a Yes vote next year. Will I be entitled to a Scottish State Pension after independence? All existing accrued pension rights will be protected in an independent Scotland, and existing pensions will continue to be paid in full and on time, as now. On the date of independence, people retiring will be entitled to the Scottish State Pension based on years of national insurance credits built up in the UK. From that point onwards, entitlement built up in Scotland will accrue to the Scottish State Pension. What form will the Scottish State Pension Take? Scotland will become an independent country in March 2016, around the same time that UK reforms to the state pension come into place in April of 2016. Those reforms will see those already over retirement age continuing to receive the basic state pension (as well as additional state pension), while those retiring after that date will receive a new Single Tier Pension. That will be the starting point for Scotland’s system of state pensions. How much will the Scottish State Pension and Scottish Single Tier Pension be? It is estimated that the basic state pensions will be at least £118.60 in 2016/17. The Scottish Government has guaranteed that this will then be uprated each year by a “triple lock” in the first years after independence. The UK single-tier pension is estimated to be worth £158.90 by 2016/17. The Scottish Single Tier Pension will be at least £160 per week (or match the UK rate if that is higher). It will also be uprated each year by a “triple lock”. At what age will I qualify for a Scottish State Pension after independence? UK government reforms will see pension ages equalised at 65 by December 2018. The state pension age will then increase to 66 by October 2020, and the UK government also plans a further increase to 67 between 2026 and 2028. Because life expectancy is shorter in Scotland than other parts of the UK, the Scottish Government proposes that an Independent Commission should review the proposed increase to 67. It may be that a lower retirement age is retained by an independent government to reflect lower life expectancy. That possibility will be lost without a Yes vote next year. What is a “triple lock”? For too many years, Westminster governments let the value of the state pension slip back, by failing to increase their value fairly from year to year. A triple lock means that the pensions are increased by the highest of: Average earnings increases Consumer Price Index (CPI) inflation 2.5% The Scottish Government has committed to increasing both the Scottish State Pension and the Scottish Single Tier Pension by the triple lock beyond 2016, for at least the first term of an independent Scottish Parliament, and it would be for future Scottish Governments to decide future policy. What about my pension credits? Older people who receive pensions credit (guarantee credit and savings credit) will continue to do so after independence. The guarantee credit will also be “triple locked” (see above) for at least the first term of an independent Scottish parliament, with future Scottish governments deciding policy after that. Without independence, the opportunity of that “triple lock” will be lost – as Westminster only increases guarantee credit by average earnings which can often fall behind prices. Another key point is that without independence, people retiring after 2016 and receiving the new Single Tier Pension would lose the right to savings credit. This is because the Westminster government intends to abolish savings credit for new pensioners from 2016. In contrast, the current Scottish Government intends to retain savings credit for all pensioners. What about entitlements through spouses? Without independence, some older people retiring after 2016 to the new single tier pensions will lose entitlements that are based on their spouse’s pensions, because of new rules introduced by the Westminster government. In contrast, the Scottish Government will retain provision based on a spouse’s contribution for 15 years after the new Scottish single tier pension comes into effect. How will this new pensions system be administered? All state pensions paid in Scotland are already administered here (at centres in Motherwell and Dundee), and will continue to be so after independence. Topics: Pensions
Posted on: Sat, 09 Aug 2014 19:34:45 +0000
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