Disclaimer: This is what we like to (politely) call a “heritage” blog. That means we haven’t updated the information here since publication (although we have tidied up the format). A full update would be too complicated and besides, it’s interesting to see how things used to be, right? What you read may or may not still be applicable today, and the details will almost certainly be out of date. So please check out more recent blogs, as we are keeping readers abreast of new developments ALL THE TIME!
As the elderly population in Scotland continues to swell, questions are being asked about how a Yes vote on independence might shake up the pension prospects of more than a million retirees in the future.
The number of Scots who will need a state pension could rise by more than 500,000 within 25 years, according to the National Records of Scotland, reaching 1.4 million.
Furthermore, research published this week by Prudential suggests one in 10 Scots about to retire this year will rely solely on their state pension.
This helping hand from the government will account for one-third of an average Scottish pensioner’s annual income.
Yet research from the Institute of Chartered Accountants in Scotland (Icas) has sparked uncertainty over what might happen, in an independent nation, to state pension entitlements built up prior to such a momentous change.
The 20-page report says: “Responsibility for the ‘accrued’ entitlement of those of working age living in Scotland to a state pension, and the practicalities of making payments to those who are currently retired, would be a major feature of any formal negotiations between the Scottish Government and the UK Government.”
A further complication has been created, ironically, by the coalition government’s simplification of the state pension, according to Icas.
The new flat-rate pension of £144 a week is due to be rolled out in April 2016, one month after Scottish independence could be ushered in.
The report adds: “UK-wide state pension reform means that the starting point for developing a Scottish state pension system is uncertain.
“Would the current UK system provide the starting point, or would the proposals for the single-tier state pension add further complexity?”