Social Policies for Old Age by B. E. Shenfield

Author:B. E. Shenfield [Shenfield, B. E.]
Language: eng
Format: epub
Tags: Social Science, Sociology, General
ISBN: 9781136262173
Google: ufJEAQAAQBAJ
Barnesnoble:
Goodreads: 13709073
Publisher: Routledge
Published: 1998-01-29T00:00:00+00:00

PENSIONS AND THE FUTURE

There is a widespread feeling that present methods of financing old age are unsatisfactory, but as yet little agreement about the kind of changes which ought to be made in existing pension schemes. Proposals for reform range from minor amendments to complete abandonment of social insurance.

THE STATUS QUO

In examining the dissatisfactions expressed about National Insurance pensions we must distinguish between those which are focused upon the current level of pension benefits, and those which reject the whole concept of social insurance as a suitable provision for income-maintenance in old age.

Demands to restore the purchasing power which pensions had in 1946 and to make them truly subsistence pensions adjusted automatically to the cost of living, involve a re-examination of pension financing but not necessarily an abandonment of social insurance. The most recent pension increases (December 1954) raised payments about 55% above the 1946 level, which corresponded to changed living costs in the period 1946-54 as measured by the ‘working class’ index of the London and Cambridge Economic Service.1 This has not however wholly met the objections of those who want a full ‘back to Beveridge’ policy. They question whether the level of payments initiated in 1946 and to which subsequent increases have been geared, was ever a true subsistence level in the sense which Beveridge intended, that is, just sufficient to live on even if the pensioner had no other means. ‘Subsistence’ they would argue has been too narrowly defined to correspond realistically to the pattern of expenditure of social pensioners. This is especially true of old age pensioners who draw their benefits not as a short-term ‘tide over’ payment, but as a sole means of living for the rest of their years. Also items in the cost of living index would need to be weighted differently for pensioners if pensions are to keep their full value in the face of rising prices.

To provide for all pensioners, except for a small minority with special needs, by way of insurance pensions at subsistence level, would require a further substantial increase in the level of pensions. To remove 806,0001 (80%) of retirement pensioners from the clientele of the National Assistance Board would have required in December 1954 an addition of about 20s. to the then standard pension (32s. 6d.). Some saving would be made on National Assistance if the Board's function were limited to meeting exceptional needs, but the pensions bill would have to be greatly increased immediately and corresponding increases would be added in the future. As it is, the much smaller increases in pensions which in fact were granted in December 1954 of 7s. 6d. single and 11s. for a couple, are estimated to cost £80m. in the first full year, rising to £130m. in twenty-five years’ time. This latter estimate is somewhat unrealistic in any case because no one can suppose that there will be no further increases in pension benefits before 1979.

In so far as such increases only reflect upward movements of prices and do not

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