Pensioners

If you're working, be warned. According to the Pensions Commission, a pension crisis is looming.

The Commission said 12 million working people are not saving enough, and the solution was some mix of higher taxes, more saving and a higher average retirement age.

As worrying, the current system isn't working well for many pensioners now.

Especially women and older pensioners. Of the 2.2 million pensioners below the poverty line, two thirds are women. The average weekly income of pensioners over 75 is almost 30% less than younger pensioners.

So how do we fix this? I don't have all the answers, but here's 3 ideas.

First, change the policy of means-tested pensions. It cuts the incentive to save for those in work and often misses the target, leaving the poorest without help. Instead, give a major basic pension rise for everyone over 75. Great for women and older pensioners. Incentives back for those in work.

Second, in private pensions, end the requirement to buy an annuity at 75 and make occupational schemes "opt out" not "opt in". Both ideas encourage private saving.

Third, nearly 90% of pensioners would benefit from replacing the unfair council tax with a tax related to ability to pay. Most who did pay more under a local income tax would at least know their bills would be lower when they retire and have less cash.