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Half of City Workers Face
Poverty-Hit Retirement
By Linda Summerhayes, Evening News
Scotland
October
26, 2005
More than half of Edinburgh's working population is facing a poverty-stricken retirement because they are paying nothing towards a pension.
Campaigners today warned that unless people took responsibility for their future income then they would not be able to make ends meet.
New statistics show that 56 per cent of Edinburgh's working population - 164,000 people - are making no contribution to work or private pension schemes.
Across the city, 60 per cent of women and 52 per cent of men who are working do not save for their retirement.
Lindsay Scott, a spokesman for Help The Aged, said: "I think they are in for a big shock. There is no doubt about it, pensioner poverty and older people falling into debt will increase unless something drastic happens.
"I think it's a bit dangerous to rely on the state pension to provide for you. The state is not providing now so why should it provide for pensioners in the future?
"People need to start assuming some responsibility for themselves in later life.
"If they are working, they must invest some of their salary in a pension."
Many people have lost confidence in pensions after money being poorly invested and schemes going bust.
Experts recently warned that private companies are £130 billion short of the funds needed to finance their existing pension schemes.
Phyllis Herriot of the Scottish Pensions Association warned that workers who relied on the state pension were facing hard times ahead.
She said that last year, her state pension went up by £2.45 but her rent want up by £2.44, leaving her with only an extra penny to meet the rising cost of bills.
"It's a misery of a pension," she said.
"It really is a shocking set-up in Britain - my heart goes out to new pensioners.
"But people who are on a low income don't have the money to put aside for a private pension.
"A lot of people on higher incomes, who did have a private pension, were left in trouble when pension companies went to the wall."
Calls have also been made for a "citizens pension" which would provide every elderly person in the UK with the same level of income, regardless of the contributions they had made.
This would particularly benefit women, who often fail to make enough pension contributions because they stop working to care for children or relatives.
Campaigners also want to see the state pension linked to average income and not to inflation. If this happened, Help the Aged says pensioners would receive £115 per week - £33 a week more than the average state pension.
The Pension Commission is currently reviewing the system and is expected to make its recommendations to the Government next month.
The figures, from the Office of National Statistics, were collated by Edinburgh West Liberal Democrat MP John Barrett, who is also calling for pensions to be linked to earnings.
He said: "Every week, I meet constituents who have worked all their lives who do not know what will happen to them when they retire.
"This level of under-saving could prove very significant in future years as people become aware of how much they have to survive on in their retirement.
"Survey after survey shows that people overestimate the level of income they will have in retirement and underestimate how long they will live for."
Mr Barrett added that the number of people making no pensions contribution has increased since 1997 when Labour came to power.
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