TUC: Pensions must increase

By THIS IS MONEY
Updated:

 

The TUC is urging the Government to increase the basic state pension beyond the expected 73p-a-week rise in line with inflation.

TUC general secretary John Monks has written to Chancellor Gordon Brown and Social Security Secretary Alistair Darling calling for more generous payments, especially to the oldest pensioners.

Basic state pension increases are traditionally calculated to run in line with September's rate of inflation, which was only 1.1%.

The letter describes the forecast payout as 'derisory' and says the Government would be at risk of breaching its manifesto commitments to give all pensioners a share of Britain's increasing wealth.

'We feel that given the historically low levels of inflation, the time is now right for an above inflation increase to the basic state pension,' it adds.

Final decisions on benefits will be made and announced by Mr Darling in the coming weeks, the DSS said.

Mr Monks will also be speaking at the TUC's pensions conference where he will call on members to embrace the proposed low-cost stakeholder schemes expected to be introduced in 2002.

The products are being designed for people on lower incomes with no access to a company pension. They will be organised through trade unions or other affinity groups.

Mr Monks will say: 'The launch of the stakeholder pension could give unions another opportunity to show non-members the value of being in a trade union.

'And with one million trade unionists without any form of pension other than from the state, unions should look seriously now at how they can provide this scheme.'

Pension facts

• The state pension in Britain is worth a fifth of what the average worker earns.

• In most of Europe, state pensions are worth half the average wage.

• By 2050 the average state pension in Britain is forecast to fall to less than 10% of average earnings.

Most watched Money videos