Pensioners in Scotland would benefit from stronger safeguards than their counterparts in the rest of the UK following a vote for independence, Finance Secretary John Swinney announced today.
Speaking at the Institute of Chartered Accountants of Scotland (ICAS) Pensions Conference, Mr Swinney announced the Scottish Government’s intention to adopt a single tier state pension (STP) from 2016, to uprate it by the highest of earnings growth, inflation or 2.5 per cent, the so called “triple lock”; and to maintain the triple lock for the Basic State Pension beyond 2015.
This would mean pensioners on the single tier pension would benefit from stronger safeguards than their counterparts in the rest of the UK where the only guarantee currently is
for a rise by earnings. The triple lock will also be retained to protect those pensioners in receipt of the Basic State Pension.
Mr Swinney said:
“Central to our vision of an independent Scotland is a pensions system which is fair, affordable and efficient – a system that rewards hard work, encourages saving and ensures that Scotland’s pensioners do not end their days in poverty.
“Those principles guide the proposals we will publish shortly.
“As leading economists have recognised, Scotland is a wealthy and productive country and spending on social protection, which includes state and public pensions, is more affordable in Scotland than for the UK. Scotland already has the people and infrastructure to ensure a seamless transition for state pensions following a vote for independence.
“The Scottish Government has made clear that pensions will be fully protected in an independent Scotland.
“Independence will give us the opportunity to ensure that future improvements to the provision and regulation of pensions of Scots are made by a Parliament which is fully accountable to the people of Scotland.
Mr Swinney pledged that the State Pension on independence in 2016 would be at the level set by the UK Government for that year.
The UK Government has currently committed to uprating the single-tier pension by at least the average growth in earnings. In an independent Scotland, the current Scottish Government would propose to uprate the single-tier pension by the triple-guarantee.
The Finance Secretary added: “Whilst decisions about future levels of these benefits will be determined by future Scottish Governments, we are announcing today that we would uprate both the existing Basic State Pension and the new single tier pension using the triple lock, ensuring peace of mind for current and future pensioners.
“The day after independence, pensioners can be reassured that they will receive the same level of state pension as they did the day before, but they will have an additional commitment from this Government that we will uprate both forms of pension by the highest of earnings growth, inflation or 2.5 per cent.
“We welcome the very positive contribution that ICAS and others such as the National Pensioners Convention have already made to the debate on Scotland’s constitutional future and we will continue to engage closely with and listen carefully to ICAS, experts and Scotland’s pensioners as we develop our proposals.”