Pensions 'should be linked to earnings'

By Tom Farley, Mon 29 Sep 2008 - Published in Pensions

The connection between the state pension and earnings should be restored, an expert has suggested.

Des Hamilton, technical director at The Pensions Advisory Service, said it is not adequate to link pensions to prices as the retail price index experienced by older people is higher than the standard one.

He pointed out that allowing women to have access to the full state pension by reducing the number of years they need to contribute will also help older people.

The expert also claimed the Pension Credit works to means test people and ensures all pensioners reach a certain level of income.

Mr Hamilton added: "All these things have to be taken together as a package but I think it is very important that basic pension is linked with earnings rather [than] prices."

Last week, Age Concern suggested one-third of those eligible for Pension Credit are not claiming and called for an automatic payment system to be introduced.

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