Advisers reject campaign to give terminally ill state pension access

Last week, TV presenter and football pundit Chris Kamara handed in a petition with more than 166,000 signatures to Downing Street calling for improved financial support for people with a terminal illness.

The Dying in Poverty campaign highlighted that people who die in working age have paid their national insurance contributions for an average of 24 years.

It has called for this group of people to have access to their state pension, stating it would substantially reduce the likelihood of a terminal diagnosis driving working age people into poverty. 

Marie Curie ambassador Kamara said: “We never had much money growing up, so I understand the strain that places on a family. Marie Curie cared for my mum just before she died in 2003.  

“I can’t imagine having to deal with both of these stressful situations at the same time but that is what everyday life has been like for the people I’ve met through this campaign.  

“What terminally ill people are going through at the moment is simply not right. Extending the state pension to people with a terminal illness would make such a big difference. Those final weeks and months are precious. People should be spending their time making memories, not worrying about money.” 

Adviser views

Following the campaign, financial planner Steve Buttercase took to Twitter to gain some thoughts from IFAs about whether the terminally ill should be eligible immediately for their state pension regardless of age. 

Buttercase said his original motivation was to canvas views from colleagues on how the state pension is often cited in campaigns, like Waspi, as a funded entitlement. 

“I know many IFAs see it as just another benefit, while some see it more as a fulfilment of the social contract between the state and citizens,” he said.

“The other point I unearthed is that because of how inadequate the benefit system is, organisations like Marie Curie look to more reliable pillars of support such as the state pension to combat poverty.”

He said as an industry, “we can be a bit pompous, conservative and technocratic”.

“I suspect very few IFAs do pro bono work for the poorest - but most respondents in this wanted the people highlighted to get more, just not via an early state pension - and that was encouraging,” he said. 

“As ever this was about the yawning chasm between what citizens believe they have, or should have, and the reality.”

However, his poll, which received 149 responses, revealed that 44.3 per cent agreed with Marie Curie while 40.3 per cent disagreed and 15.4 per cent were unsure.

David Crozier, senior financial planner at Navigator Financial Planning said there is a misunderstanding among the general public that the state pension is an entitlement, to which one builds up a fund during one's working life, to be drawn on in retirement. 

“That is not the case,” he said. “It is a benefit, paid for from current taxation, designed to help fund retirement for those who make it that far.”

If a terminally ill person is unable to work, there are a number of state benefits already available to them, some means-tested, some not. 

If they continue to work, then the need for benefits should not arise, he explained.

“We have to accept that there is a limited amount of money available to be spread across many competing priorities,” he said. 

“The fact that there are already benefits available, it doesn't seem like a good use of resources to divert money from an already-stretched state pension system.”

Crozier added: “People who are terminally ill are in a horrible situation, and (as correctly highlighted by Marie Curie), their position can be made much worse by financial pressures. 

“Where the government could help is by making it easier for people who are genuinely ill and unable to work to claim benefits to which they are legitimately entitled and desperately need."

Likewise, Victor Sacks, director of VS Associates said “it would be wonderful” to allow those who are terminally ill to access state pension, but that's not how it's defined or set up.

“Scheme pensions, personal pensions, absolutely, but state pensions. It's a no from me,” he said.

Chartered financial planner Elliot Guthrie said his thoughts mirrored many other advisers, stating that working age benefits lag some way behind the state pension.

“To say you were getting your state pension earlier would already compound the incorrect view that the state pension is anything other than a state benefit, so I would call it something different, or in reality, just increase existing working age benefits for those with a terminal illness,” he said. 

“I also don't like the way that Marie Curie frames this as 'missing out' on the state pension, it's a state benefit and always has been, to start paying it out to 25,000 people under state pension age would come at some considerable cost, where would the funding come from.”

"Safeguard against poverty"

The end-of-life charity is calling for urgent government action ahead of the Spring Budget.

Sarah Middlemiss from the end-of-life charity Marie Curie said: “The state pension is the single biggest safeguard against poverty for people as they approach the end of their lives. 

“But if you are unfortunate enough to die before retirement age, it isn’t accessible to you. The government must extend access to the state pension to all dying people, regardless of age. 

“Anyone can be given a terminal diagnosis at any time.”

Middlemiss said there is simply not enough financial support available for terminally ill people. 

“That’s why we’re urging the prime minister to make good on his pledge to always protect the most vulnerable. We know the public supports this. We know it is affordable. The government could end this injustice in its Spring Budget next month.”  

A Department for Work and Pensions spokesperson said: “A terminal diagnosis is an unimaginable challenge, and our priority is providing people with financial support quickly and compassionately. 

“Those nearing the end of their lives can get fast-track access to a range of benefits without needing a face-to-face assessment or waiting period, with the majority receiving the highest rate of those benefits.

“In 2022 we extended that support so thousands more people nearing end of life would be able to access these benefits earlier through special benefit rules.”

The DWP said this change has already been implemented for Employment and Support Allowance and Universal Credit and the government has recently passed an Act which enables similar changes to Personal Independence Payment, Disability Living Allowance and Attendance Allowance.

The Social Security (Special Rules for End of Life) Act 2022 amends the definition of terminal illness in existing legislation, so people who are considered by a clinician as having 12 months or less to live – rather than the current six months – can have fast-tracked access to personal independence payment, disability living allowance and attendance allowance.

FTAdviser understands ministers will respond to Marie Curie’s letter in due course.

sonia.rach@ft.com

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