Personal Pension  

Scottish pensions will only work well in unity: Webb

Mr Webb, speaking today (6 May) before the Scottish Affairs committee, told his peers that only if Scotland remains as part of the union will there be less volatility and more protections for Scotland’s pensioners.

He said: “The bigger the base on which you are trying to build, the better, as smaller equals greater volatility.

“The whole structure in place nationally for the pensions system works because of the scale: the pension protection fund works because of scale and it would not work so well operating at a tenth of its size.

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“If there is a hit to a smaller PPF, it would be a bigger hit relative to the tax base of an independent Scotland.”

He added that the cost pressure would be bigger and the tax base to fund an operational pension scheme for Scotland would be “less robust”.

Chairman Ian Davidson asked whether it was “feasible to drop the pension age in Scotland as people die quicker and the state would pay less”.

Mr Webb said this would not work because of the long-term demographic pressures, adding: “Scottish life expectancy will improve just as fast as the rest of the UK but pension scheme funding would not improve as fast in the same way.”