How to solve the Pensions crisis

Steven Trigg ACMA, CGMA

Heritage Party Pensions Spokesman

man standing beside white wall
Photo by Caroline Hernandez on Unsplash


It is well known that the UK state pension is insufficient to give pensioners a reasonable standard of living, with many elderly people having to choose between eating or heating. This situation is intolerable in any society, but particularly so in one of the richest countries in the world.

When the chancellor explained his reasons for the temporary double lock system replacing the triple lock by removing the earnings index, he included fairness to young taxpayers, but the reason for removing the earnings index is that earnings have risen, and therefore the burden on younger taxpayers is paid for.

Removing the earnings index for one year has ramifications for all future years. It means that any indexation will be added to a lower starting point. That means all future pensions will be much lower ad infinitum, and not just for one year.

Additionally, this sets a dangerous precedent. The point of the triple-lock is the protection of pensioners’ living standards in comparison with general economic trends, but if the government is able to amend this safeguard when it suits them, what protection is really being afforded.


The target of any formula used to set pensions must be to maintain a reasonable standard of living for pensioners. At the very least, pensions should be sufficient to provide the basic necessities of life, including family involvement and socialising.


Basically, a person should contribute during their lives into an earmarked pension fund. These funds should be invested wisely and should give rise to a decent pot to live on during retirement. However, when Old Age Pensions were first introduced, they were not paid from earlier invested funds, but from current cash flow. This means that today’s workers are paying for today’s pensioners, and not investing for their own pensions.

This situation means that the state pension system resembles a Ponzi scheme. It relies on more working people joining in order to pay out to retired members of the scheme. However, the birth rate amongst the British people has fallen, except in a few specific demographic groups. People are also living longer. Therefore, as the number of young people falls and the number of pensioners rises in proportion, this puts a greater burden onto the workers. 

Effect of Immigration on Pensions

There is also the problem of immigration, both legal and illegal, running at high levels. Someone born in this country and who works for their entire lives will contribute for around 49 years into the national pensions pot. An immigrant, arriving at the age of, say, 30 years, will only contribute for around 37 years, but will be entitled to the same pension under the current rules. Add to this the fact that they are entitled to use the NHS from the day they arrive, having contributed nothing towards it, and the strain on the public purse becomes skewed away from those who have contributed all their lives and towards the newcomers, many of whom will never contribute, but who will also use all the resources of the welfare and education system from the day they arrive.


There are a number of strategies that can be investigated, each designed to balance the working population with the retired population, and to generate funds, not just for pensions, but for all societal needs. The overall aim has to be to reduce the burden on the state and also to increase the productivity of the nation so that decent pensions can be afforded.  The Heritage Party pledges to investigate the following:

  1. Reduce immigration – A reduction in unnecessary immigration will reduce the strain on infrastructure, the NHS, education and the welfare system. The (fake) Conservatives have often pledged this, but under them net immigration has risen to over 300,000 per year.

Labour would be even worse, with not even the pretence of wanting to control our borders.

Reducing immigration does not mean stopping immigration. Any immigrant coming into the country should be coming to take up employment in a sector where there are skills shortages, or should have sufficient funds to pay for accommodation and to support themselves and their families for life.

2. Encourage people to work – The more people in work, the fewer benefits paid and  the greater the amount of available income that can be invested for pensions:

a. There has to be a complete reform of the benefits system, coupled with better incentives for employers to train young people in the trades and professions.

b. The education system needs to be reviewed. School-teachers and university professors alike should teach their subjects without expressing their personal opinions, and the curriculum should reflect the needs of the economy, not just the needs of academia. The work ethic has to include competitiveness and a sense of communal responsibility, yet too often competitions in schools are frowned upon or banned. Because children are not being allowed to fail, they leave school unable to cope with failure.

c. Help for ethnic and religious minorities to find work – this is a difficult and complex area, which encompasses cultural issues as well as discriminatory issues. Extremism on all sides must be addressed. Schools and community initiatives can play a big part in this, as can a reduction in immigration. People arriving from highly discriminatory cultures bring those ideas with them, so there is a constant re-enforcement of cultural divisions.



Norway has a sovereign fund, which is actually two funds, a global and a national fund. Broadly it takes a percentage of Norway’s surplus petroleum industry taxes and invests them in a fund that is kept totally separate from other central government funds. This fund is used to finance pensions.

If the UK were to start such a fund, how could it be financed? Well, Eight years ago the British Geological Society published a report that states that the UK has sufficient shale oil deposits to meet the countries needs for 25 years. More recently, Francis Egan, CEO of Cuadrilla Resources, has stated that there is sufficient shale gas, mostly in Northern England, to last us 50 years, if only 10% is extracted. That would certainly be a good start.

There is some controversy about shale gas extraction, but technology advances and safer methods can be found. Fracking has been going on in parts of England for decades with no reported ill effects on the environment. The Heritage Party is monitoring this situation, but it seems that the environmental impact of modern fracking techniques has a lower impact than coal mining had, although further research is necessary.


This Sovereign Pension Fund could also be partly financed by National Insurance. The Heritage Party believes that NI revenues should be split into three separate, earmarked funds to finance the NHS, pensions and welfare.

The collection of National Insurance should also be completely reviewed. The Heritage Party is currently looking into the question of the total unfairness of National Insurance, to the detriment of the poorest in society, whom it is designed to help.


The Heritage Party would make pensions affordable and give our pensioners a living pension. We would create a sovereign fund, and make the scheme sustainable by seeking to help get people from all communities into work, reduce discrimination from all quarters, welcome immigrants who can fill skills shortages, concentrate on education and training in the fields that help our economy and our communities, and ensure that a formula would be used to set the pensions level  that is fair and sustainable, and which can’t be altered at the whim of the incumbent government.

We would also stop illegal immigration and get Brexit finished.

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