26th August 2010  

Britain’s pensioners have been entitled to feel pretty fed up in recent years. Remember Gordon Brown’s measly 75p increase in the basic pension a few years ago? And the decision taken by Mrs. Thatcher’s Government in 1980 to break the link between the basic state pension and the increase in average earnings? That decision by the Conservative Government of 1979-1997 meant that those reliant on the basic state pension became poorer and poorer in relation to the rest of the population each year, and it helps explain why Britain’s basic state pension is one of the lowest in the “developed”, richer, world. To help the poorest pensioners, Gordon Brown introduced a means-tested “pension credit”, but the problem with this is not just that people have to claim this benefit (and many do not), but also that it is a powerful incentive for many people not...