Pensions, Retirement and the Elderly

Retirement Age

• In July 2023, the UK government delayed a planned review of the state pension age, which had been expected to increase to 68 earlier than planned.  This delay came amidst concerns about rising life expectancy, pension costs, and fears of public backlash.  While the delay was intended to gather more evidence, it leaves many uncertain about their retirement plans and forces reliance on the state decision-making process.

• By being over-prescriptive about the pension age, the government limits individuals' ability to decide when to retire.  This reliance on a state-defined retirement age constrains personal freedom in retirement planning, especially for those who want to retire earlier or later based on their personal financial situation.

• The pension system as it stands is over-complex.  We favour an overhaul and simplification of the current system.

• Freedom Alliance therefore supports a flexible retirement age, allowing individuals more freedom to choose when they retire.

Pensions and the Triple Lock

• The UK's Triple Lock system guarantees that state pensions increase by whichever is highest: inflation, average earnings, or 2.5%.  Recently, concerns have been raised that the government may suspend or alter this system due to rising inflation and wage growth.  For example, in the summer of 2023, with average earnings rising sharply, the government expressed concerns about the fiscal sustainability of maintaining the triple lock.  This system places pensioners' income at the mercy of governments whose policies rarely place the interests of pensioners high on the agenda.  Freedom Alliance would always support keeping the Triple Lock in place.

• We would encourage the use of personal pension schemes and flexibility in retirement planning via tax breaks for those who participate.  Individuals who save for their retirement should not be taxed on income from private pensions.

• Over the past few months, there has been a renewed push to expand auto-enrolment into workplace pensions, lowering the age threshold and increasing contributions.  While this helps ensure individuals save for retirement, it also mandates increased employer and employee participation in a state-regulated system.  This limits individual choice on how much individuals save for retirement and where their money is invested, and pushes them into government-approved schemes and reduces personal autonomy in managing retirement funds.  While there is a role for such schemes for those who want them, these should be offered on an opt-in basis.

Welfare & Winter Fuel Allowance

• Pensions and care for the elderly should be set at a level that allows a suitable standard of living.  We oppose making spending cuts that are detrimental to the lives and health of the elderly.

• Freedom Alliance would always keep the Winter Fuel Allowance for pensioners.

General Welfare & Benefits Reform

• We favour a simplification of the benefits system to reduce running costs and complexity.  We believe that while there are of course individuals who will always lack capacity to be independent, benefits should act as a safety net rather than a long-term solution, and believe that a simplification and streamlining of the current system would assist in getting individuals back on their feet and away from government dependency.

• We explicitly reject Universal Basic Income (UBI) on the grounds that it could potentially lead to a huge increase in government bureaucracy to manage, track, and distribute the payments, as well as impose great additional burden on the taxpayer.  More insidiously, however, there is the danger that UBI could be a tool for social engineering, where once a certain level of public dependency had been established, the government could impose conditions or rules on how individuals spend their UBI funds.  Policymakers will almost certainly be tempted to use UBI payments to influence social behaviour or incentivise certain activities, such as spending on (or not) specific goods or services, or adhering to certain political ideologies.  This would erode individual freedom by giving the government undue control over personal decisions.

• While some parties propose scrapping Universal Credit, there is insufficient clarity on potential alternatives.  We would investigate alternatives that address both short-term and long-term welfare needs.

• We would certainly resist moves to administer or limit access to benefits via purely digital means, as those on welfare are among the least likely to be able to access advice and support online.  It is also vitally important not to lose the human touch when dealing with the vulnerable, who literally cannot afford to be on the end of a governmental “computer says no” situation.  Freedom Alliance would enshrine in-person and telephone support as a basic principle in the name of accessibility.

Employment Benefits

• We would incentivise work and employment by lifting the income tax start point to take the bottom 10% of earners out of paying income tax and by offering tax relief to businesses offering permanent positions to benefits claimants.

• The “Enterprise Allowance” was a scheme in the 1980s that encouraged individuals on unemployment benefits to start a business by awarding a cost of living grant for the first year until the business became established and profitable.  Freedom Alliance would bring back Enterprise Allowance and investigate further incentives for self-employment, such as not ringfencing the scheme for only benefits claimants.

• This would be accompanied by stripping out red tape that disincentivises those who might otherwise become self-employed or start a business.

• Strengthen the contributions-based side of unemployment benefits so they are more strongly linked to the level of National Insurance contributions.

• Job Centre reforms – they tend to specialise in the low-skill end of the jobs market, treating newly unemployed white collar workers with suspicion.  There is a poor emphasis on accessing retraining, with the focus instead being on pushing claimants into applying for any advertised job, whether or not it is likely to be viable for the individual in the long term.  Freedom Alliance calls for a more comprehensive service that takes account of jobseekers’ experience, education, and desired career, with links to tertiary education institutions for retraining and upskilling purposes.

• Freedom Alliance calls for a wider availability of apprenticeships, including for nontraditional apprentices: mature employees wishing to change careers, mothers returning to work, the vulnerable and disabled.

• Overhaul employment legislation where this discourages organisations from hiring.

• Incentivise businesses that continue to make employment available in the UK, i.e. not automating or offshoring jobs.

Child Benefits and Family Welfare

• Investigate ways to overhaul child benefit.  We do not regard it the role of government to incentivise or otherwise family size; however, there have been occasional abuses of the system.

• While childcare is an emotive topic for many, our children are already at risk of being institutionalised at a very young age.  Freedom Alliance would investigate the possibility of support for parents as alternatives to nursery provisions for parents who opt for more time with their children.

Disability Benefits and Carer Support

• Entitlement to disability benefits to be decided by a family GP, specialists or consultants familiar with the individual’s needs, rather than private contractors like ATOS.

• Investigate ways to ensure disabled individuals’ ability to access support and services in their communities.

• Improve access to Carer’s Allowance, with earnings not to affect eligibility.  We call for tax incentives and VAT breaks for care providers.

• However, we are also concerned about tackling tax avoidance and other sharp practice by large care home providers.

• More accessible services for individuals requiring mental health support.

• Better access to information about benefits and entitlements to carers.

• Streamline social care provision with simplified funding streams and elimination of bureaucratic waste.

Welfare for Non-Citizens and Migrants

• Freedom Alliance would investigate ways to curb the culture of state welfare dependency among some immigrant populations.  This would include English language and literacy lessons, instruction in British cultural norms and encouragement to venture outside of social enclaves, and greater help and incentives to find work.

• The UK’s over-generosity towards those who have not contributed anything has made it an attractive destination for migrants seeking to improve their standard of living.  While refugees have always been appropriately supported by the UK, we would seek to curtail automatic handouts for illegal immigrants and economic migrants.

• Most legal migrants come to the UK to work.  However, they need to have lived and worked in the UK and paid NI contributions for a minimum period before they are able to claim benefits.  Benefits for non-citizens to be based on reciprocal agreements with other countries.

• Child allowance and other welfare payments should only be claimable for individuals actually residing in the UK.