The 100th anniversary of the start of the state pension system is celebrated this month. The Old Age Pensions Act was passed in August 1908 and the first payments to pension fund holders were made on 1 January 1909.
Over half a million people – comprising of the old and very poor of society at that time – queued up at their local post offices to collect the first state pension payments available in the UK but when the details of the system are looked at, it seems hard to draw a line between the original system and that in place today by anything other than name.
Initially, the maximum weekly payment of five shillings (25p) for a single person was considered a meagre sum – it’s modern day equivalent would have been around £20 – and to get even that the person would have to be at least 70 years old. This might seem a only a slight difference to todays pensionable age but at the turn of the century, without the improved living conditions of today, only 5% of Britain’s population were older than that.
To add to difficulty in receiving pension benefits, the new pension system was means-tested to boot. A person would only be eligible for pension payments if their income was less than 12 shillings per week, and having too much furniture in their home could see their payment reduced.
Convicted criminals, drunks, the voluntarily unemployed and individuals of “bad character” might have their pension payments refused outright.
The eligibility of claimants was inspected by pensions officers – civil servants who would visit potential and current claimants in their homes to make assessments of the person’s circumstances. These reports would then be passed on to a separate pensions committee for review.
The 1908 Old Age Pensions Act was bought in due to neccessity. As living conditions improved, people were starting to live beyond the point where they were physically capable of working. While the Friendly Societies of the time were geared towards supporting prosperous workers and workhouses were built to house and employ the destitute, there was no support for the emerging generation of elderly, unemployable people. The Victorians called the phenomenon retirement that this generation experienced “retirement”.
It took 30 years and the election of Liberal government to see a system put in place that would support the unemployed elderly.
Over the years the pension system has seen many changes – in 1928 the pension age reduced to 65, in 1948 national insurance contributions were taken into account and the pension age for women was reduced to 60 – and with the pensionable age set to reach 68 by 2048, the pension system in this country will look a distant relation to the original 1908 Old Age Pensions Act.