Like a growing number of people I’m still working at 70, and haven’t claimed my state pension. Given that my generation is constantly being blamed for a whole variety of social ills (refusing to sell our homes and downsize, plus daring to work full-time, thus allegedly preventing younger workers from moving up the ladder), I fully expected to be told that my nest egg would be subjected to a new form of tax.
In fact, baby boomers could be due a windfall. In May, the Government will publish their six-yearly review into pensions and is said to be thinking of handing out one-off cash payments for those who continue to work in their seventies and don’t claim their state pensions. The accumulated funds would grow at the rate of 5.8 per cent a year – but I’d like to see them taxed at a special low rate when they are finally claimed.
It’s our money that we have lent back to the state, funds which the Government has had the use of during the years while we’ve worked. In short, working pensioners have freed up millions in unclaimed pensions, enabling the Treasury to balance their books and keep the welfare system afloat.
The Government is more than likely to scrap the triple lock which protects pensions from inflation – perhaps one way of sugaring that bitter pill is to guarantee that unclaimed pensions that have been sitting in the coffers of Department for Work and Pensions for decades can be handed over with no strings attached. I fully expect to be called selfish, but I think state pensions should only ever incur minimal tax regardless of your salary.