The Old Age Pension

The state pension scheme reaches its 100th birthday this month, but it took over 30 years before it became a reality. It was during the Victorian age that it was first realised that people were starting to live past the age when they could physically work and various proposals were examined. Five government committees and a Royal Commission all examined various proposals. Britain’s trade unions started campaigning for old-age pensions in the 1890’s but nothing was done until the Liberals won a huge electoral victory in 1906.
The driving power of the new government was David Lloyd George, Chancellor of the Exchequer under Herbert Asquith. In 1908, he put through Parliament an Old Age Pensions Act granting pensions to all old people with small incomes. To finance it, he drew up a national budget that put new taxes on the wealthy. These taxes threatened to break up the old landed estates, so the Conservative House of Lords rejected Lloyd George’s budget, but a general election showed that the mass of the British people favoured it. So strong was public support that in 1911 an act of Parliament abolished the power of the House of Lords to reject a money bill such as a budget.
The Old Age Pension Act of 1908 did provide for more people, but it did not provide enough to live on and was a very meagre, ‘means tested’, pension. It was implemented in January 1909 and the act provided for a non-contributory old-age pension for persons over the age of 70 years, at a time when only 5% of the population were older than that. In order to be eligible you had to have an income of less than 12s a week and the pension could be reduced if you had too much furniture. Also you had to pass a ‘character test’; only those with a ‘good character’ could receive the pension. Those who had refused work, were habitually drunk or had been imprisoned during the previous 10 years received nothing from the scheme. You also had to hold British Nationality and lived in the country permanently since 1875, and not been in receipt of charitable donations or detained in a workhouse or mental health asylum. It paid a weekly pension of between 1s and 5s (10p to 25p) and 7s 6d (37.5p) for married couples. If we adjust the full pension paid at this time to allow for inflation, this would amount to £19.30 in today’s money. The level of benefit was deliberately set low to encourage workers to also make their own provision for retirement.
Let us take a look at the expenditure of a pensioner in 1909 that received the maximum 5s pension. They would pay about 2s rent for one room, leaving them with 3s for food, fuel etc, which would buy: coal (6d), ¼ lb tea (6d), ½ lb sugar (1d), quart of milk (3d), 7lbs potatoes (3d). ¼ lb cheese (2d), ½ lb cheap cuts of meat (3d), leaving 6d over for vegetables, beer, or other expenses.
To check up on claimants and their entitlement, civil servants known, as pension officers would visit people in their homes, assess their circumstances and then make recommendations to a separate pensions committee.
In 1909, there were 500,000 people who were eligible for the state pension. At this time there were 52 people over 70 years of age living in Cheslyn Hay. However a few were not eligible for the pension as they had private means. Two residents that received the pension for the shortest time were Hannah Lunt, a shirt maker, aged 76 years, who lived with her daughter and son-in-law in Hill Street and James Perry, a miner and native of Cheslyn Hay, aged 76 years of Low Street. Unfortunately, Hannah died in April that year and James in March. James’ wife, Amy Perry aged 75 years, survived him and she received the pension for 1 year, dying in January 1910.
Among those residents that did benefit from the pension were William Williams of Landywood Lane, who received it from its conception in 1909 for 13 years until his death in 1922 aged 84 years. Ann Wright of Low Street qualified for the pension in 1910 and she received it for 16 years until her death in 1925 aged 85 years.
In 1919, pensions increased to 10s (50p) and in 1940, unmarried women’s eligibility for a state pension was reduced to the age of 60 years.
By 1941, life expectancy had risen for women to 64 years and men to 59 years. The National Insurance Act of 1946 introduced contributory state pension for all. Initially pensions were £1.30 a week for a single person and £2.10 for a married couple. They were paid from the age of 65 years for men and 60 years for women effective from 1948.
In 2008, there were 12,000,000 people eligible for the state pension with the full single person’s pension being £90.70 per week. In the UK there are 7.2 million people aged over 70 years, there are 4 workers for every person who has retired and 1 in 4 people are expected to live to reach 100 years old.

No Comments »