Ensuring financial security
Hearing Older People's Voices
Older people want action to ensure they have access to:
- flexible employment opportunities
- measures and initiatives that promote their financial security (including pensions, benefits, meeting funeral costs and avoiding fuel poverty)
- support for planning for life changes
- measures to address the issues raised by the rising retirement age and the implications it has for older people’s caring responsibilities and volunteering opportunities.
Supporting positive engagement – what government and stakeholders are doing, and will do
Promoting ongoing employment for older people
The number of older people in Scotland who choose to work continues to increase, and we know from national statistics that over half of workers over state retirement age in Scotland report that they are not yet ready to stop working. Financial reasons are most commonly cited as the motivation behind delaying retirement, but older workers also speak of wanting to continue to use their skills and experience and enjoy the social interaction of the workplace.
Three quarters of people thought it wrong to make somebody retire because they reach a certain age
Source: Social Attitudes Survey 2015
We are committed to enabling older people to remain in employment for as long as they wish. We published research in 2016 that explored the drivers behind the consistent increase in pensioner employment (those still in paid work beyond the age of eligibility for State Pension) over the past decade, and commissioned a second study to develop understanding of the motivations, opportunities and barriers experienced by older workers (defined as those aged over 50).
The research highlighted that most participants expressed a desire to reduce their working hours prior to retirement, but knowledge of flexible working options and provisions was low. Half of the sample group referred to their financial circumstances when discussing the timing of retirement. Plans appeared to be closely tied to whether a person had sufficient financial resources to ensure a reasonable standard of living without income from paid employment. Those with the highest household incomes and biggest pension pots had a greater degree of choice over when to leave the labour market than lower-income participants.
Around a quarter of participants indicated that they would like to retire before they reached State Pension age but could not afford to do so, either because they would not have access to any other source of income, or because any state benefits or private/occupational pension income they might receive would be insufficient to meet household needs. Pensions sufficiency was less of a concern for the lowest earning participants, as the move from low earnings to State Pension would not represent a significant drop in their income.
There was widespread lack of knowledge and understanding among participants relating to their own pension provision. Many did not know how much money they would receive out of their pension (not only the State Pension, but also private and occupational pensions).
The report recommended a number of actions, including:
- providing pension-related information via a range of channels and media, including traditional paper-based communications
- increasing older people’s awareness of flexible working opportunities and the right to request flexible working
- improving recognition that women still carry out most caring responsibilities
- the Scottish Government leading a series of events and workshops for employers across Scotland to share good practice and discuss adoption of more age-inclusive working practices.
We have therefore been using this and other research to inform policies, such as the Workplace Equality Fund, on supporting older people who wish to extend their working lives.
Age should not be a barrier when someone wishes or needs to work and can contribute in the workplace. There needs to be willingness among employers to engage older people and recognise their skills and experience. Support that will allow older workers flexible working arrangements to accommodate health and care commitments, such as the Family-Friendly Working Scotland Partnership and the Carer Positive scheme should be a priority for employers. We established the Carer Positive employer accreditation scheme for employers with flexible employment policies for staff who are also unpaid carers. Nearly 350,000 employees in Scotland are now working in 135 Carer Positive organisations (as of February 2019).
I just felt that I had no-one to talk to at work, I was constantly being left out and my health suffered.
The Scottish Government promotes the uptake of the Living Wage, which benefits older workers financially, and has successfully reached the target set by the First Minister to have 1,000 Scots-based Living Wage Accredited Employers – there are now just under 1,400. Since October 2016, we have provided funding to local authorities as part of an overall investment in social care to enable adult social care workers to be paid the real Living Wage. We believe that all hours worked should be paid at the minimum of the real Living Wage, and the commitment is being extended to cover sleepover hours during 2018–2019. We will increase our package of investment in social care and integration to exceed £700 million in 2019–2020, underlining our commitment to support older and disabled people and recognising the vital role unpaid carers play.
We have fulfilled our commitment to supporting a Returners Project across industrial sectors in which occupational segregation is a concern. These projects helped experienced women to return to the workplace after a break, helped them update skills and knowledge, and enabled employers to gain from retaining skilled staff. As stated within A Fairer Scotland for Women: gender pay gap action plan, published in March 2019, we will learn from the Returners Project and will invest £5 million over the next three years to support around 2,000 women to return to work.
We have highlighted in the gender pay gap action plan the additional barriers women can face in the labour market because of gender and age. Women transitioning through the menopause while in work, for example, can require support. The Scottish Government wants to set a positive example in this area and is currently reviewing its workplace guidance.
The action plan also sets out our commitment to fund a feasibility study for a Centre for Flexible Work for Scotland. This Centre, a UK first, would design, test, embed and scale new approaches to increase the availability of quality, flexible work in Scotland.
We are funding several projects through the £750,000 Workplace Equality Fund to support the development of age-inclusive workplace practices. In partnership with Impact Funding Partners, we supported a Workplace Equality Fund business-to-business learning event in March 2019 to share good practice, including lessons learnt on the adoption of more age-inclusive working practices.
Work with employers and trade unions to improve workplace practices for the benefit of women, with a particular focus on supporting women who have protected characteristics. This will be taken forward through an expanded Workplace Equality Fund, based on lessons learnt from the previous Fund.
Work with women’s organisations and trade unions to gain a clearer picture of the issues faced by women transitioning through the menopause to identify other areas where action may need to be taken.
Continue to work with partners, including Age Scotland, Business in the Community, the Chartered Institute of Personnel and Development and the University of Edinburgh, to promote good practice to employers.
Overall, there needs to be a greater emphasis on more intelligent deployment of older workers, particularly in occupations that are physically challenging. The aim is to ensure the skills and experience of older workers are used to maximum effect while work-related risks to physical and mental health are reduced.
Work is already taking place in the public sector in this area: Scottish Water, for example, offers middle-aged workers a ‘Career MOT’ that enables individuals to review how they wish to continue working into the future and enables them to tailor their careers to achieve maximum benefits for themselves and the organisation. This kind of approach needs to be supported by active measures to ensure older workers keep healthy through, for example, attention to ensuring workplace canteen menus include healthy options, reviewing shift patterns and working practices (ensuring regular movement opportunities for those with sedentary jobs, for instance), and ensuring access to health promotion advice and support. Healthy workplaces are those that actively promote good physical and mental health.
Similarly, we will continue to engage with private sector employers and their representative business organisations to ensure older workers are supported to remain active participants in the workforce and have access to retraining and upskilling opportunities and health and wellbeing support as required.
Healthy Working Lives, the Royal Society for the Prevention of Accidents, the Chartered Institute of Personnel and Development and other stakeholders are now looking again at the need for information and advice for employers on how to best support an ageing workforce. This is being taken forward under the auspices of the Partnership for Health and Safety in Scotland’s plan for action on safety and health (for more information, visit: http://www.hse.gov.uk/scotland/).
Fair Work is central to our economic strategy: it is good for workers, good for business and good for Scotland. The Fair Work Action Plan published in February 2019 sets out how we will deliver our ambitions on fair work. It was developed in consultation with the Scottish Trades Union Congress, the Fair Work Convention, employers and other stakeholders. The action plan will be regularly reviewed and refreshed to reflect the progress being made.
It focuses on actions to:
- support employers to adopt Fair Work practices
- deliver Fair Work to a diverse and inclusive workforce
- embed Fair Work across the Scottish Government.
We have also committed to co-host an International Fair Work Summit with the Fair Work Convention to showcase Scotland’s achievements in this field and will increase the number of people employed who are paid the real Living Wage in Scotland, focusing on traditionally low-paid sectors and locations
The Fair Work Convention was established in April 2015 and developed the Fair Work Framework, which states that:
“By 2025, people in Scotland will have a world leading working life where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society. The Fair Work Framework sets out what is meant by fair work, why it is important, who can play a part in making Scotland a world-leading nation in fair work and how this might be achieved.”
The Fair Work Convention published its report, Fair Work in Scotland’s Social Care Sector 2019, on 26 February 2019. The report makes five recommendations, including for the Government to support the creation of a new sector body that establishes minimum standards for fair work terms and conditions and to reform social care commissioning. Most of the workforce are women, with many over 50. The report calls for urgent interventions by policy-makers, commissioners and leaders in the social care sector to improve the quality of work and employment for the 200,000 strong workforce in Scotland.
Respond to the Fair Work Convention’s report, Fair Work in Scotland’s Social Care Sector 2019, and the recommendations it makes.
Making training and education accessible to all in older age
All older workers will in the future need access to ongoing training opportunities, and older people with free time might want to pursue their interests through education, either at university level or perhaps by joining, for instance, a local historical society or language class. Some educational opportunities carry a price tag, and we don’t want financial pressures to dissuade older people from following their interests.
Enrolling at a Scottish university in older age is not as rare as some people might think. Between academic years 2011–2012 and 2016–2017, an average of 7,067 people aged 50–60 and 3,636 over 60 enrolled for university courses each year.
We are committed to providing all students in Scotland, including those who are older, with the financial support they need to succeed. Following a review of our student loan age-cap policy, we decided to increase the age at which students can claim a maintenance loan from 55 to 60 from academic year 2016–2017.
Access to university for people of all ages from the widest range of backgrounds remains a key priority for the Scottish Government. Our aim is that by 2030, everyone, no matter their background or circumstances, has an equal chance of going to university. As well as free tuition, all students, regardless of their age, are eligible to apply to the Student Awards Agency Scotland for a means-tested bursary and additional living-cost grants. All universities in Scotland also have a discretionary fund to which students experiencing financial difficulty can apply for help with study-related costs, such as travel.
Ensuring financial security in older age
Financial security in older age is important in allowing older people to live the kinds of life they wish, to remain engaged with their communities, pursue interests and passions, and continue to develop and thrive as individuals. Remaining in paid employment for longer will clearly support this aspiration, but for many older people, financial security depends on ongoing access to pension funds (both state and private) and a range of other financial benefits and measures.
Figures released by Age Scotland show that over 200,000 over-65s in Scotland are struggling financially,c despite an estimated £292 million in Pension Credit and Housing Benefit alone going unclaimed each year. We ran a campaign in March 2017, backed by Age Scotland, to raise awareness of financial support available. This included a full media campaign in a bid to reach as many people as possible, as vital benefits can make a major difference to keeping people out of poverty: if every person eligible for Pension Credit and Council Tax Reduction received their entitlement, this would help lower poverty levels among older people.
The Scottish Government has committed through the Fairer Scotland Action Plan to helping older people claim the financial support they are entitled to and has worked with partners to develop a Financial Health Check, with a strand for older people. We launched the free Financial Health Check Service for older people (and low-income families) in November 2018 following the successful 2017 pilot and the ‘You’ve earned it, Claim it’ campaign.
Many older people are concerned about having to sell their home to pay for care as they get older. The Scottish Government appreciates that some people would prefer to delay the sale of their home following their move into a care home, and introduced legislation in 2002 to allow local authorities to set up Deferred Payment Agreements through which they recover the cost of care only when the property is sold.
A Deferred Payment Agreement is a legal contract between the local authority and the individual through which the local authority recovers the cost of care only when the person’s property is sold. It may include provisions on the amounts to be deferred, agreements over insurance, maintenance and letting of the property, arrangements for termination of the agreement and any other provisions that have been agreed.
The Scottish Government will commence delivery of Disability Assistance for Older People, the devolved replacement for Attendance Allowance, a disability benefit for people over State Pension age. We will award Disability Assistance for Older People to help with extra costs if a person has a disability severe enough that they need someone to help look after them.
In developing our approach to delivering Disability Assistance for Older People, we have engaged with older people and their carers, in particular those who currently receive Attendance Allowance, to establish areas in which we could improve once the benefit is being delivered by Social Security Scotland.
Commence delivering Disability Assistance for Older People by the end of 2020.
Protecting the State Pension
State Pension policy currently is reserved to the UK Government. The Scottish Government supports the equalisation of the pension age for men and women in principle, but cannot agree with the unfair manner in which the UK Government is imposing these changes on women. We have urged the UK Government to reconsider transitional arrangements for the affected women, but so far without success. We will assess the impact of the changes with a view to providing support to these women when we are able to do so.
The Scottish Government has written regularly to the UK Government about the WASPI (Women Against State Pension Inequality) issue. The rapid acceleration of the State Pension age for women to equalise it with the age for men has left many women without adequate notice to prepare for retirement, causing distress to those affected and a real economic disadvantage and inequality. We believe that this is wrong, but the powers available to us through the Scotland Act 2016 do not allow us to create a new benefit where somebody would qualify by reasons of old age.
The increased pension age will also affect carers. If the State Pension age increases, carers could potentially be poorer for longer – Carers Allowance is significantly less per week than the State Pension. Carers also have less opportunity to build up a private pension, so may have less money than non-carers when they retire.
The Scottish Government’s response to the UK Government’s State Pension policy and wider welfare benefits has equality at its heart. Our aim is to mitigate the ill effects of Westminster policy as much as our powers enable us to do so. We will not tolerate people in Scotland becoming poorer simply because they are getting older.
We remain committed to tackling fuel poverty and ensuring everyone in Scotland lives in a warm home that is affordable to heat. We allocated £114 million in the 2017–2018 budget for fuel poverty and domestic energy and will also make available half a billion pounds over the next four years to tackle fuel poverty and improve energy efficiency. This means that by the end of 2021, we will have committed over £1 billion to making our homes and buildings warmer and cheaper to heat.
Two in five older households were in fuel poverty Percentage of older housholds in fuel poverty
Source: Scottish House Conditions Survey 2017
We continue to fund the Energy Saving Trust to deliver Home Energy Scotland to provide energy efficiency advice and support services. The service includes the offer of a benefits check, provision of energy advice on how to reduce fuel bills and keep homes warm, and exploration of the possibility of being referred to a Scottish Government energy-efficiency scheme. Home Energy Scotland also provides in-home support to the most vulnerable fuel-poor households.
A home energy efficiency programme for Scotland scheme – Warmer Homes Scotland – was launched in September 2015. The scheme has a strong focus on insulation and heating measures to improve the energy efficiency, warmth and comfort of fuel-poor households. The first annual review was completed in November 2016 and concluded that most beneficiaries were over the age of 60.
Winter Heating Assistance is currently delivered by the UK Department for Work and Pensions as the Winter Fuel Payment. First introduced in 1997, the Winter Fuel Payment is a universal, annual tax-free payment made to pensioners to help towards their winter heating costs.
Start delivering Winter Heating Assistance in winter 2021 to eligible older people in Scotland who are in receipt of another type of payment from Social Security Scotland. Anyone currently receiving Winter Fuel Payments will automatically transfer to the new benefit. We have made a commitment not to means-test the benefit and have no plans to make changes to the benefit.
Supporting unpaid carers
The Scottish Government recognises the huge impact unpaid carers have not only on the lives of the people they care for, but also to the country’s economy. It is estimated that unpaid carers save the economy around £10.8 billion per year in care costs.
There are an estimated 759,000 carers aged 16+ in Scotland – 17% of the adult population – 171,000 of whom are caring for 35 hours a week or more.
Percentage providing unpaid help or care for a sick, disabled or frail person
People aged 50-64 were most likely to have provided unpaid care
A higher proportion of women than men provided unpaid care
Source: Scottish Health Survey 2017
Carers are not paid workers, and they are not volunteers. The Carers (Scotland) Act 2016 has put in place a new system of carers’ rights to ensure carers are better supported on a more consistent basis so they can continue to care, if they so wish, in good health and have a life alongside caring. The Act gives carers rights to be listened to and to access social care support to help protect their health and wellbeing. This includes supporting them to achieve their personal goals (such as returning to work or undertaking studies), alongside caring.
A key requirement for successful implementation of the Carers Act and other work to support carers will be to retain and communicate a strategic focus on the vital role played by carers and the importance of supporting them to have a life alongside caring. That is why we are developing a Carers Strategic Policy Statement that will define the Scottish Government’s approach across Ministerial portfolios to achieve our overall ambitions on national policy to provide support to carers. Work on the Carers Strategic Policy Statement is ongoing and involves discussions with stakeholders, including carers and carer organisations. We intend to hold a public consultation later in 2019 and aim to publish our final Statement by early 2020.
Carer’s Allowance was one of our first commitments in light of our new social security powers and reflects the recognition we give to carers. The increase is delivered through the Carer’s Allowance Supplement, which brings Carer’s Allowance to the same level as Jobseeker’s Allowance at £73.10. The supplement is paid to people in receipt of Carer’s Allowance in Scotland in a lump sum twice a year. The first payments were made from mid-September 2018 and were backdated to April 2018. In 2018–2019, each carer will be eligible to receive two payments totalling £442 a year.
Continue to work with local authorities, health boards, carer organisations and others to embed the recently established rights for Scotland’s 788,000 unpaid carersd under the Carers[d] (Scotland) Act.
Work to increase employer participation in the Carer Positive scheme to extend carer-friendly employment practices so that more carers can balance work and caring.
Tackling funeral poverty
We are committed to taking action on the issue of funeral poverty. A review in 2016 for the Scottish Government by Citizens Advice Scotland and John Birrell found an increasing number of people struggling to pay for basic funerals and highlighted the difficult situations many families up and down Scotland find themselves in when recently bereaved.
It can be difficult for families to shoulder this extra burden at a time when they are already distressed. We therefore published a Funeral Costs Plan in August 2017 that sets out 10 actions the Scottish Government will take across a range of areas to help tackle funeral poverty and make more affordable funeral options available. Actions in the plan include:
- piloting an incentivised funeral savings scheme (previously known as the Funeral Bond)
- seeking to improve market transparency by publishing guidance on funeral costs for cemeteries, crematoriums and funeral directors so it is easier for people to understand and compare funeral options
- putting in place a more effective safety net in the form of Funeral Expense Assistance that will replace the current Department for Work and Pensions Funeral Expenses Payment in Scotland in summer 2019.
Delivery of Funeral Expense Assistance will allow the Scottish Government to provide financial support directly to people on lower incomes who have been bereaved, reducing the burden of debt they may face when paying for a funeral. We have widened eligibility by 40% compared to the current payment by changing the process to determine responsibility for the funeral. This means that we will help people who would receive no support at present, including older people. This widened eligibility is backed by around £2 million of extra Scottish Government funding in the first full year of operation above that to transfer from the UK Government, taking forecast spending to over £6 million annually. We are also trying to improve the parts of the application process that people find difficult or upsetting at present and aim to process completed applications within 10 working days, with payment made as soon as practicable thereafter.
The Scottish Government has worked with both the Scottish Pensioners’ Forum and the Scottish Older People’s Assembly during the development of Funeral Expense Assistance and on other funeral poverty matters. Older people will continue to be involved as we develop the application process to deliver Funeral Expense Assistance. At UK level, older people received over 30% of all Funeral Expense Payments in 2017–2018. Pension Credit will continue to be a qualifying benefit for Funeral Expense Assistance, so we expect that support will continue to be provided to older people who are struggling with the costs of a funeral.
We have committed to uprating Funeral Expense Assistance to take into account the impact of inflation from 2020–2021. This means that in addition to helping more older people with funeral costs, older people in Scotland will receive improved financial assistance compared to older people in the rest of the UK.
Continue to engage with the funeral Poverty and Funeral Expense Assistance Reference Group, which includes representation from the Scottish Older People’s Assembly, the Scottish Pensioners’ Forum and the Scottish Working Group on Funeral Poverty, on Funeral Expense Assistance.
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