Shadow pensions minister Gregg McClymont has said Scotland’s state pension provision will be hit by a demographic “triple whammy” should the country vote for independence next September.
His comments follow a Pensions Week report in July that revealed ministers will be meeting this month to discuss how a split UK pensions system could work, in particular with regards to EU solvency requirements, which dictate that any cross-border scheme would need to be fully funded.
But McClymont said there was a wider issue concerning state pensions and Scotland’s ‘dependency ratio’ – the ratio of population in employment to those that are not – also needed to be addressed.
“Scotland on the official projections is looking at a demographic triple whammy of a society ageing faster than the UK as a whole, fewer young people coming into the workforce to support that greater number of elderly… and the issue of more years being unable to work through sickness and ill health,” he said.
He questioned how much greater the cost of providing a state pension would be in the event of independence, and said the Scottish National Party had not thus far put forward details of how its potentially more expensive flat-rate pension would be funded.
“The SNP announced that they would implement [the] flat-rate pension at the same level as the UK without any explanation of the cost – no costings whatsoever,” he said.
Population projections indicate there will be a bigger increase between 2010 and 2035 in the proportion of the Scottish population who are pensioners than in the UK as a whole, according to Kirsty MacLachlan, head of demography division at the National Records of Scotland. This equates to an increase in Scotland to 22.8 per cent from 20 per cent, and in the UK as a whole a rise to 21.3 per cent from 19.5 per cent.
"Half of the projected growth in Scotland relates to those of pensionable age, whereas in the UK as a whole less than a third of the growth relates to those of pensionable age," she added.
A Scottish government spokesperson said that it recognised the population is ageing across the UK as a whole, but said independence would give Scotland access to all the key levers of economic growth to boost investment and create more jobs across the economy.
The spokesperson added: “The finance secretary John Swinney recently announced that a single-tier pension would be introduced in an independent Scotland from 2016 and would be uprated by the triple lock. Existing pensioners would see no change in their state pension entitlement and the basic state pension will continue to be uprated by the triple lock.
“Further details will be published shortly.”
