The flat rate state pension won't be better for all

The introduction of the flat rate state pension next year is supposed to mean a better deal for everyone, but it seems that one swathe of people have been overlooked.

The idea behind the flat rate, which will see the state pension increase to around £150 a week next year for those who have paid 35 years of national insurance, came from a good place. It was intended to make sure that no-one was left in absolute poverty in old age and make the extremely complicated system simpler.

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It will do its job for the majority of people, but a report by the London School of Economics and the Pensions Policy Institute has flagged up a problem. There is a distinct lack of transitional reforms for those older people who rely on benefits, such as housing benefit and council tax benefit.
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These benefits are means tested, meaning that the more income a person has coming in, the less help they receive. If the state pension is finally paying them a decent amount that's great news because they're getting more, but at what cost to their benefits?

The government may be giving with one hand but it could be taking with another, leaving people in a worse position.

The report says that people will lose more in means tested benefits than they receive through an increased state pension, which is worrying considering the flat rate was supposed to bring us a step closer to eradicating old age poverty.

Even more worrying is that this problem is only going to get worse if people are unable to buy properties of their own, pay off their mortgages before retiring and use their pension solely to live on rather than paying for accommodation.

There are thousands of people who are in their 30s and 40s who have given up on the dream of owning their own property and have resigned themselves to the fact that they will always be tenants. When they reach retirement, where will they live and who will pay for their rent?

We're rapidly selling off our social housing so their local council isn't going to be able to provide them with a property, they will be forced to remain in privately rented properties, handing over any pension they've accumulated to their landlord.

It's a worrying pattern that is emerging but unfortunately this government isn't even looking at how to solve the present housing crisis let alone a future housing crisis.

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