Disability Alliance UK (United Kingdom) - Response R46 - Disability Benefits Consortium response to Principles for Reform

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Response R46 - Disability Benefits Consortium response to Principles for Reform – The National Pensions Debate

Please reply to: Disability Alliance,
88-94 Wentworth Street
London E1 7SA

Pensions Client Directorate
Department for Work and Pensions
3rd Floor
The Adelphi
1-11 John Adam Street
London WC2N 6HT

25th April 05

Dear Colleagues,

Principles for Reform – The National Pensions Debate:
Disability Benefits Consortium Comments

We welcome this brief discussion of the pensions journey, and of the principles on which maintained and improved pensions provision needs to be based in times of changing demography and uncertain economic prospects. In particular, we are pleased to see the inclusion of the second principle – that everyone should have the opportunity to build up an adequate retirement income – since disabled people have historically been excluded from pension provision. We welcome the specific recognition of the needs of those caring for disabled family members, and of those whose earnings may be prevented, interrupted, terminated prematurely, or restricted – often by disability.

Disability, for individuals and for families, can mean in terms of provision for retirement any one or more of the following: Inability to enter the labour market at all.

Interruption of earning because of disability/ill health itself or treatment needs, sometimes for long periods and sometimes for short but frequent periods.
Termination of earning power, sometimes at a point when earnings would have been at their highest.
Restricted ability to maximise earnings by overtime, promotion, job mobility, taking up training opportunities, etc.
Loss of the possibility of going on working beyond pension age, because of increasing disability or the onset of health problems later in life – while others will be forced to retire before state pension age.
Need to accept low-paid work below the person’s natural potential – for example those whose career ambitions are cut short in their twenties by the onset of enduring mental illness.
Eating into savings and the possibility of additional personal pension provision because of extra disability-related costs. (This can also apply to families with a disabled child where means-tested disabled facilities grant means consuming capital to make the house suitable.)

We acknowledge the very positive impact of the Pathways to Work pilots and other Government initiatives to assist disabled people to enter or remain in work, and therefore likely to have better opportunities to save. However, it is important to recognise that for many disabled people work will not be a feasible option.

While it is true that disability can strike at any time from birth to late in working life, it is also the case that the risk of becoming disabled is substantially higher for poorer/disadvantaged groups. This is important in the context of pension provision as these groups will have been least able to build up private pensions and save earlier in their working life.

For many, maintaining a high standard of living once no longer working is important. For others, the provision and maintenance of a decent level of basic pension is what matters most – since they have never been able to achieve more than a modest earned income. For both groups, long-term financial security is important – with their pension or pensions maintaining their value and not falling further and further behind the income standards and consumer expectations of those still working. Ensuring that older disabled people are not excluded by poverty is the Government’s primary role in relation to this group. It is better in all ways if such provision does not have to be claimed as a series of extras but comes as of right. This is in line with the drive towards greater simplicity in pension provision (and taxation)

Disability means extra costs as well as restricted income, and we take the opportunity of referring to our support for the campaign to secure for people over pension age (65 rather than SPA) the range of disability costs benefits available to those becoming disabled in relation to self-care and mobility under pension age.

We have welcomed the concept of the Pension Service, and the part that this can play in a wider older persons strategy. Given the high incidence of disability among older people, it is obviously important that the Pension Service is fully accessible to people across the whole range of disabilities.

We look forward to seeing disabled people having more prominence, alongside family carers, in the next pension policy papers.

Yours sincerely

Lorna Reith

For the Disability Benefits Consortium

Who are the Disability Benefits Consortium?

The consortium consists of the following organisations:

Action for Blind People, Disability Alliance, Leonard Cheshire, Macmillan Cancer Relief, Mencap, Mind, Motor Neurone Disease Association, Parkinsons Disease Society, Radar, RNIB, RNID, Scope, Sense and Skill as well as Age Concern, Carers National Association, Child Poverty Action Group, Citizens Advice, Contact a Family, L’Arche UK, and the TUC.

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