Latest news with #LizKendall
Telegraph
17 hours ago
- Business
- Telegraph
Liz Kendall faces fresh benefits backlash
Liz Kendall is facing backlash over her planned benefit cuts after MPs warned that slashing universal credit (UC) payments would push more disabled people into poverty. On Tuesday, the influential Work and Pension Committee said it was alarmed by Ms Kendall's proposed changes to UC, which will see top-up payments to new claimants who are disabled halved from £423.27 to £217.26 a month from 2026. The committee, chaired by Labour MP Debbie Abrahams, warned that slashing the benefits risked forcing more disabled people into poverty. The reforms risk reducing payments for people with severe mental health conditions, the committee said, because their condition may not qualify for a full UC payment. Ms Abrahams said that the Government's own analysis showed that the reduction in the UC health top-up payment would push approximately 50,000 people into poverty by the end of the decade. However, Helen Whately, shadow work and pensions secretary, said: 'Politicians should be trying to get welfare spending under control, not handing out even more cash. It's a sobering fact that the British Government spends more on sickness benefits than on defence – this cannot be allowed to continue.' UC is Britain's main benefit and it replaced a myriad of other payments, such as jobseekers' allowance, child tax credits and housing benefits in 2012. Claimants who are disabled can claim a top-up payment in addition to standard UC, but the Government is hoping to change this amid fears too many people are claiming it on spurious grounds. Welfare battle Ms Kendall had been battling rebels from her own party to push through a watered-down version of her welfare reforms. Following a government policy reversal and a series of major concessions to Labour rebels, it eventually passed at the start of the month. As part of her reforms, Ms Kendall, who is the Work and Pensions Secretary, has sought to address Britain's ballooning welfare spending, which is estimated to reach £378bn by 2029-30 – almost double the £210bn paid out to claimants in 2013-14. Yet concessions made to the bill are expected to wipe out a third of the £5bn they had been expected to save taxpayers, piling further pressure on the Treasury. Ms Kendall warned earlier this month that once workers start receiving the health element of UC, only 3pc a year manage to get off the benefit again. Despite this, Ms Abrahams said: 'There are still issues with these welfare reforms, not least with the cut in financial support that newly sick and disabled people will receive.' Ms Abrahams has been a staunch critic of the Government's welfare reforms bill alongside other Labour rebels, including Meg Hillier and Rachael Maskell, who had pushed for changes to the bill. The fallout over the bill is far from over, as Ms Abrahams told Sir Kier Starmer at the Liaison Committee that the 'fear and anxiety' felt by disabled people following the Government's welfare reform bill 'cannot be underestimated'. In a tense exchange between the Left-wing MP and the Prime Minister last week, Ms Abrahams said the reforms were 'far removed from Labour values' and warned that the Government 'must do better'. A recent report from the Office for Budget Responsibility warned that the UK's national debt is on track to spiral from just under 100pc of GDP to 270pc in the next 50 years if nothing is done to reduce the benefits bill. A government spokesman said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance universal credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament.'
Telegraph
a day ago
- Business
- Telegraph
Millions to lose up to £18,000 in savings from pension reforms
Millions of workers in their 50s face losing up to £18,000 if the Government accelerates a rise in the state pension age, a leading wealth manager has warned. Rathbones, which manages the savings of older people, said introducing a state retirement age of 68 earlier than planned threatened to hit people aged 51 the hardest, while people aged 52 and 53 would also lose out. The Government is exploring whether to raise the state pension age to 68 more quickly. It is currently set to be phased in from 2044, but Liz Kendall, the Work and Pensions Secretary, is considering bringing this forward five years to 2039 as part of the Government's pensions review. According to Rathbones, those aged 51 would lose an entire year's worth of state pension payments if the timetable is accelerated. That would be worth £17,774, assuming today's state pension of £12,000 increases by the so-called triple lock each year. Under the triple lock, the state pension rises by the highest of inflation, average wages or 2.5pc per year. Meanwhile, people aged 52 would miss out on £17,340 and those aged 53 would lose £16,918. Each of those age cohorts – 51, 52 and 53-year-olds – comprise some 800,000 people, meaning around 2.4 million risk missing out on significant five-figure sums. Rebecca Williams, from Rathbones, said Britain's ageing population would put a growing strain on the public finances. She said: 'With longevity increasing and population pressures mounting, future generations appear set to face a less generous state pension regime than that enjoyed by many of today's retirees. 'The situation appears particularly precarious for those in their early 50s who face the real prospect of missing out.' The state pension age is currently 66 and will rise to 67 by 2028. Spending increasing Raising the state pension age is likely to prove politically challenging. Previous pension reviews recommended increasing the pension age in the late 2030s, but the move was not put into legislation. However, financial pressure is growing, and Ms Kendall acknowledged when launching her review that she was 'under no illusions' about the scale of the challenge. Estimates from the Office for Budget Responsibility (OBR) show that state pension payments will amount to 5.1pc of GDP this year, up from 3.6pc two decades ago. That bill will keep on mounting, rising to almost 8pc by the 2070s. Overall spending on pensioners, including the state pension, housing benefit and winter fuel payments but not counting healthcare costs, came to £150.7bn last year and will rise to £181.8bn by the end of the decade, according to the OBR. The Government has sought to limit the increase by restricting the share of pensioners who receive winter fuel payments. However, it was forced into a partial about-turn after a backlash from voters and Labour's own backbench MPs, showing the difficulties of reining in benefits spending. It means there is increasing pressure from the public finances to find ways to save money for the long term, potentially including further increases in the pension age. The Institute for Fiscal Studies estimates that raising the pension age by one year saves the Government around £6bn per year. Nigel Farage, leader of Reform UK, last week said the state of the public purse means the pension age should be increased more rapidly, in line with life expectancy. 'I don't think we can really afford to [wait to the 2040s], to be frank,' Mr Farage said. 'If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.' The International Monetary Fund last week said that if the Government stuck to its promise not to raise taxes on 'working people', then it would have to consider reining in spending, 'to align better the scope of public services with available resources'. 'In particular, the triple lock could be replaced with a policy of indexing the state pension to the cost of living,' the global economic watchdog said.
Daily Mail
2 days ago
- Health
- Daily Mail
Hating your boss is 'not a mental health condition', says ex-high street chief amid fears workplace problems are being 'overmedicalised'
Hating your boss is 'not a mental health condition', employees have been warned. The former chairman of John Lewis has raised concerns amid the 'overmedicalisation' of workplace problems. It comes as one in five people of working age have a health condition that affects their job and there are 2.8million people inactive due to ill health. This is up from 2.1million since before the Covid pandemic - though the numbers have been steadily rising over the years. The ex-high street chief, Sir Charlie Mayfield, has now been appointed by Liz Kendall, the work and pensions secretary, to come up with plans to stop workers leaving their jobs because of poor health. Mr Mayfield's report is due this autumn. He told The Sunday Times: 'The last thing I wish to do is trivialise [mental health conditions] but I agree that things do get over-medicalised. 'That's not to say there aren't medical issues that need to be dealt with through proper clinical medical interventions, but there's a lot more that can be done through the workplace and through encouraging discussion and relationships and processes that encourage that. 'It might be better to say: "What's making you anxious?" Because then we can do something about that. And how do you deal with it if you've got [an employee with a] "I hate my boss syndrome"? Well, we can do something about that. We can say "Is it the case that your boss is hateful?", in which case, that's probably an issue that we should figure out how we deal with.' Mr Mayfield added there were also the possibility the boss was 'quite legitimately doing what they should be doing' meaning it is 'not hateful behaviour' and in fact might be 'what bosses are meant to do'. He went on to say bosses should be routinely in contact with employees when they are signed off to help support their return to work. Sick notes also create an 'impregnable barrier' between employer and employee, according to the former high street mogul, with those in charge often too scared of contacting staff for fear of 'causing offence'. The 58-year-old believes lessons can be learnt from the Netherlands where there is a mandatory six-week intervention meeting requiring employee, employer and occupational health to agree a return-to-work plan with two-week monitoring cycles. He pointed out that statistically the longer someone is away from work, the harder it is to get back and the less likely that person is to do so. Mr Mayfield said it should become normal that people are contacted when they're off sick and that while some organisations are ready to do this, most are not. The former John Lewis chief pointed to a fear of individuals disclosing health conditions and also line managers not wanting to offend people about something obviously personal to them. He also offered 'keeping in touch days' like those used by women on maternity leave as a solution - to help solve the disconnection between employer and employee, improving return-to-work outcomes. Flexibility is also key - particularly among the over 50s - as a way to boost participation, according to Mr Mayfield.
Yahoo
3 days ago
- Business
- Yahoo
How much you need in your pension to retire — and four things to help you reach that amount
Pensions are back in the spotlight after the government announced new measures to tackle the growing issue of people failing to have enough money when they retire. Liz Kendall, the work and pensions secretary, said on Monday that almost half of the working age population 'isn't saving anything for their retirement at all'. She has revived the pensions commission, which last met in 2006, in a bid to determine how best to help workers after experts warned that people looking to retire in 2050 are on course to receive £800 per year less than current pensioners. The scale of the issue cannot be underestimated. Rachel Vahey, head of public policy at AJ Bell, said the government's own analysis pointed to a 'dire need for intervention'. 'Retirees in 2050 are on course for 8 per cent less private pension income than those retiring today. While automatic enrolment has created 11 million new pension savers, many are saving the bare minimum,' she said. 'The demise of private sector defined benefit pensions and a levelling down of contribution rates by some private pension schemes have meant that, although there are more pension savers in the UK, they are not all saving enough.' To put that into perspective, the Retirement Living Standards says you need £14,400 a year for a single person or £22,400 for a couple, just to have a minimum comfort lifestyle. For 20 years of retirement, that's an outlay of £280,000 at the bare minimum. And, if you're targeting a comfortable retirement, that can rise to around £44,000 for a single person and £60,000 for a couple. So what can you do right now to ensure you're better off when you do retire? The Independent takes a look. Employer contribution amount A common complaint with pensions planning is that, with tough living conditions, many need money now – never mind years from now in retirement. So, as a starting point, check your employer contribution to your pension and what else they have on offer. The automatic enrolment scheme requires eight per cent overall to go towards your pension, with employers contributing three per cent at a minimum. However, many workplaces may offer a higher amount than that to match your own contribution – so they'll go up to to five per cent if you pay the same amount for example, but only as an opt-in option. As such, you should absolutely ask your workplace if that's the case and see what you need to do – this may just be signing a form or clicking a box online. Do check if it means you have a different pension provider, plan or any other changed details to ensure it suits you. On a £35,000 salary across five years with a firm, that extra two per cent is an additional £3,500 going towards your pension pot – without any change at all to your payslip. Changing your own contribution Also linked to the above is a change in your own contribution level. Yes, upping your pension contribution means less money going into your bank account immediately. But small sums which aren't so noticeable now might work out in your favour later on. On a £35,000 salary one per cent is less than £30 per month. Upping your contribution rate from 5 per cent to 6 per cent, for example, will only see you get a small amount less in your pay packet – you'd have National Insurance and tax taken off before it arrives in your bank account – but over a 40-year career, that's more than £14,000 extra going towards your pension. The perfect time to do this might be after you secure a new job, promotion or pay rise as you won't feel any hit from one month to the next. And, don't forget, that doesn't mean your pension total value goes up £14,000 – it means there's that amount extra going towards the investments which are in your pension fund. Over the long term, investments tend to outperform cash, so over that four decade period of time, you'd expect it to contribute to grow your total pension fund by more than that value. As you get older, you may find you have the financial ability to contribute more towards pensions without compromising your living standards; if so, it's certainly something you should consider, especially if you do not already invest separately. State pension, SIPPs and the self employed There's of course more you can do, depending on your circumstances, to ensure you're not left struggling when it comes to retirement. The first thing in the years before you hit state pension age is to check you don't have any gaps in your record. You can backpay National Insurance contributions to 'buy' those years, but do the sums first (or check with an advisor) to ensure it makes financial sense for you to do so. Typically, you'll need around three years of pension payments to reclaim that extra initial outlay. Additionally, you may well have pension plans outside of your workplace one. If so – such as a self-invested personal plan (SIPP), a Lifetime ISA or a personal pension which is managed for you – you can make contributions to these and receive an additional payment towards it in the form of tax relief at the same rate as you pay tax on your salary. Ideal times for this might be when you get a raise, earn a larger than usual commission, receive a bonus or sell some personal items. Last but not least, self-employed people are at extreme risk of a later-life shortfall. It is estimated more than 80 per cent of self-employed people do not save towards a pension at present. If that's you, this is what you need to know about changing that.
Times
4 days ago
- Business
- Times
How I plan to survive retirement without a state pension
Generally speaking, I'm not a huge fan of risky moves. I would rather wait an extra hour at the airport than stress over missing a flight, I find it hard to negotiate on price for fear of losing a deal completely and I refuse to get behind the wheel if I've had a single drink. With all these decisions, the anxiety caused by the potential loss outweighs any positive that the risk brings. Rushing through security to walk straight on to a flight may be exhilarating for some, but my heart rate would still be elevated when I landed at my destination. There is one area, however, where I'm simply going to have to take more risk: my pension pot. As a young (ish) saver, the safest thing to do is to assume that the entire responsibility of funding my retirement will fall to me. And that requires more risk. This week the work and pensions secretary, Liz Kendall, said she was 'formally announcing' the next government review of the state pension age. As the last review concluded in 2023 — and the government only has to review the age every six years — this was earlier than expected. It's looking likely that the age at which you get your state pension will rise sooner than planned. The state pension age is 66, increasing to 67 between 2026 and 2028. Another jump to 68 is pencilled in for 2046, but will probably be moved forward. To assume that the state pension age will stay at 68 by the time I get there (in about 38 years) would be foolish. In fact, to assume there will be any state pension at all is unwise. The state pension is a financial headache for the government. It costs about 5 per cent of GDP, up from about 3.5 per cent in the year 2000, according to the Office for Budget Responsibility (OBR), and is forecast to be 7.7 per cent by 2070. It's also getting harder to find the cash to fund it. People are living longer and having fewer babies — aka future taxpayers. The UK's old-age dependency ratio, the population aged 65 and over as a percentage of those of working-age (16 to 64), is set to increase from about 33 to 50 by the mid-2060s, according to the OBR. So my private pension is going to have to do the heavy lifting in my retirement — at least if I want to stop working before I'm 75. And the easiest and cheapest way to boost my pot is to increase my level of investment risk. • How to get a nation of savers investing 'It's important for younger savers to take risks with their pension — that just means investing in the stock market, not taking a punt on bitcoin. If you have 30 or 40 years until retirement, your pension should be heavily, if not exclusively, invested in shares,' said Laith Khalaf from the investment firm AJ Bell. 'The exception would be if you have a nervous disposition and can't bear to see a fall in the value of your savings. Even then, the fact that you are saving regularly into a pension means you get a smoother journey even with a relatively high content invested in the stock market.' Historically, the stock market has provided the best investment returns in the long run. If, 30 years ago, you had invested £1,000 in the Investment Association's global sector of funds that are invested entirely in stocks, you would have £8,150 today. The sector of funds that are 40 to 85 per cent invested in the stock market would have returned £5,657, while the 20 to 60 per cent stocks option would have returned £4,362. But most pensions are not invested in 100 per cent equities, even for workers who are just starting out. Most pension savers are automatically enrolled into workplace pensions and put into 'default' funds — a one-size-fits-all option that has to be appropriate for 20-year-olds and 50-year-olds. This means that many default funds will only have about 60 to 70 per cent of their pot invested in shares. The rest will be in assets such as cash or bonds, that are considered less volatile but are also unlikely to grow at the same rate. Effectively, these pots are simply the least worst fit for the workforce as a whole. • How to stop the taxman taking a big slice of your pension I confess that this is still how my pension savings are invested. James Coker from the wealth manager Quilter Cheviot said this was unlikely to be my best chance at building a hefty pension pot. He said: 'Moving your pots into an equity portfolio will serve you well over the long term. Someone in their thirties or forties is arguably decades away from retirement and stocks have the greatest inflation-adjusted growth potential. Stocks have to form the basis, if not all, of your portfolio.' With the ever-increasing likelihood that my income in retirement will be on my shoulders alone, it's time to make the move. The cheapest way for me to do this is to move my pension pots into a global tracker fund, a low-cost option that replicates the performance of global stock markets. It may feel risky, but the alternative — a pot that doesn't plug the hole left by a disappearing state pension — feels even riskier. • Top of the pension pots: the best place for your Sipp
