UK Should Cut Rich Pensioners' Benefits to Raise Payments for Poor - OECD

MOSCOW (Sputnik) — The United Kingdom should cut state retirement benefits to the most wealthy pensioners in order to raise the payments to those with the lower income, Mark Pearson, Deputy Director of Employment, Labour and Social Affairs of the Organisation for Economic Co-operation and Development (OECD), said in an interview with the Financial Times newspaper Thursday.

According to Pearson, the United Kingdom with its aging society, is challenged by the situation in which the state pension is growing while the number of workers is falling, which can subsequently force the authorities to ask people of working age to pay more or to work longer before they can claim their pension.

"Another way to ensure an adequate pension is to think about whether the pension should only be paid to those who really need it, to ease the tyranny of the maths. Giving less [pension] to the people at the top would free up resources to increase general benefits," Pearson said, as quoted by the newspaper.

The retirement benefits are seen as one of the most discussed issues among the UK politicians ahead of the upcoming snap general election scheduled for June 8. Media reported Wednesday that the country's Prime Minister Theresa May had repeatedly refused to directly confirm if the state pensions uprating scheme known as the "triple lock" would be still used after the election. The scheme implies the increase of the retirement benefits by 2.5 percent on an annual basis, which is a more generous uprating policy than for working-age benefits and child benefit.

The media outlet reported, citing the OECD data, that the UK retirement benefit is among the least generous of the organization's 35 member states amounting to 6,359 UK pounds ($8,204) annually for the basic state pension and 8,296 pounds for the new pension introduced in 2016.

In 2016-2017 the state pensions spending is expected to amount to 91.6 billion pounds, which is 12 percent of total public spending in the country, according to the UK Office for Budget Responsibility data.