THE Scottish Government insists pensions - both the state pension and occupational schemes - would be largely unaffected by independence.
Indeed, ministers have promised to improve the state pension very slightly. Those reassurances have been dismissed by the No campaign as wishful thinking. It warns an independent Scotland would struggle to maintain state pension payments at present levels, while occupational pension members would be hit by EU rules on cross border schemes.
Q: What would happen to the state pension in an independent Scotland?
A: The Scottish Government has promised more generous old-age pensions if Scots vote Yes. Current pensioners would see payments rise by at least 2.5 per cent from 2016. New pensioners would receive a single-tier pension from 2016, modelled on UK plans, but £1.10 per week higher at £160.
Ministers say they may reject the UK Government's plan to raise the pension age to 67 by 2028. They believe raising the pension age is unfair on Scots because of their lower average life expectancy.
The Institute of Chartered Accounts Scotland (ICAS) has warned that separate Scottish and UK pensions could discourage people from moving between the countries for work.
Q: Could an independent Scotland afford more generous state pensions?
A: The UK Government says the costs would be considerable. Failing to raise the pension age to 67 would cost an independent Scotland £6billion between 2026 and 2036. It would also take £9billion out of the economy as people stopped work earlier. Setting a single-tier pension £1 higher than the UK would cost an extra £50million per year after 20 years. The number of pensioners in Scotland is expected to grow from 1million to 1.3million over the next 20 years. The Institute for Fiscal Studies has warned that an independent Scotland would face greater pressure on its public finances than the UK in the decades to come, partly as a result of its ageing population.
Q: What would happen to public sector pensions?
A: The two biggest unfunded public sector pensions schemes, for teachers and health service workers, are paid by the UK Government. The UK also pays civil service and armed forces pensions. The Scottish Government says all public service pensions would be "fully protected and accessible" in an independent Scotland and infrastructure is already in place to deliver them. How much of the liability for paying those pensions would transfer to an independent Scotland would need to be negotiated after a Yes vote but the UK Government says it could be about £100billion.
Q: What would happen to private and occupational pensions?
A: The Scottish Government says a new pensions regulator would be created but it would work closely with the existing UK authorities. The UK's Pension Protection Fund, which pays compensation when a pension provider collapses, would continue to serve Scotland, the SNP insists. ICAS has questioned whether the plan would work in practice - and whether the UK Government would agree "to such a degree of risk sharing."
Q: What would happen to "cross border" pension schemes?
A: ICAS has drawn attention to potential difficulties for UK-wide occupational pension schemes which would become "cross border" if Scotland became independent. Many are heavily underfunded, such as the Universities Superannuation Scheme which has a deficit of nearly £10billion. Under EU rules those schemes would have to find huge amounts of money to become fully-funded or split into separate Scottish and UK schemes. It's feared scheme members would get a worse deal as a result.
The Scottish Government insists the EU would allow funds time meet the rules. However ICAS believes a three year period of grace, as suggested by the Scottish Government, would be "wholly inadequate" for schemes to adjust.
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