Pensions in the United Kingdom
Pensions in the United Kingdom can be categorised into three major divisions and seven sub-divisions, covering both defined benefit and defined contribution pensions.: State pensions Basic State Pension State Second Pension Occupational pensions Defined benefit pension Defined contribution pension Individual/personal pensions Stakeholder pensions Group personal pensions Self-invested personal pensionsPersonal accounts, automatic enrolment and the minimum employer contribution are new categories which joined these from 2012. Automatic enrolment has been successful, but there are a number of myths remaining around the scheme, which professional bodies and companies are working to eradicate; the state provides basic pension provision intended to prevent poverty in old age. Until 2010 men over the age of 65 and women over the age of 60 were entitled to claim state pension. Longer-term, the retirement age for both men and women will rise to 68 by no than 2046 and much earlier; the basic state pension known as the "Old Age Pension" was introduced in the United Kingdom in January 1909.
A pension of 5 shillings per week, or 7s.6d per week for a married couple, was payable to a person with an income below £21 per annum, following the passage of the Old-Age Pensions Act 1908. The qualifying age was 70, the pensions were subject to a means test; until the 20th century, poverty was seen as a quasi-criminal state, this was reflected in the Vagabonds and Beggars Act 1494 that imprisoned beggars. In Elizabethan times, English Poor Laws represented a shift whereby the poor were seen as morally degenerate, were expected to perform forced labour in workhouses; the beginning of the modern state pension was the Old-Age Pensions Act 1908, which provided 5 shillings a week for those over 70 whose annual means did not exceed £31 10s.. It coincided with the Royal Commission on the Poor Laws and Relief of Distress 1905–09 and was the first step in the Liberal welfare reforms towards the completion of a system of social security, with unemployment and health insurance through the National Insurance Act 1911.
After the Second World War, the National Insurance Act 1946 completed universal coverage of social security. The National Assistance Act 1948 formally abolished the poor law, gave a minimum income to those not paying National Insurance; the early 1990s established the existing framework for state pensions in the Social Security Contributions and Benefits Act 1992 and Superannuation and other Funds Act 1992. Following the respected Goode Report, occupational pensions were covered by comprehensive statutes in the Pension Schemes Act 1993 and the Pensions Act 1995. In 2002 the Pensions Commission was established as a cross-party body to review pensions in the United Kingdom; the first Act to follow was the Pensions Act 2004, which updated regulation by replacing the Occupational Pensions Regulatory Authority with the Pensions Regulator and relaxing the stringency of minimum funding requirements for pensions, while ensuring protection for insolvent businesses. In a major update of the state pension, the Pensions Act 2007 raised retirement ages.
Since the Pensions Act 2008 has set up automatic enrolment for occupational pensions, a public competitor designed to be a low-cost and efficient fund manager, called the National Employment Savings Trust. The Act amended the timetable for increasing the state pension age to 66. Under the PA 2007, the increase to 66 was due to take effect between 2024 and 2026; this Act brought forward the increase, so that state pension age for both men and women will begin rising from 65 in December 2018 to reach 66 by October 2020. As a result of bringing forward the increase to 66, the timetable contained in the PA 1995 for equalising women's and men's state pension ages at 65 by April 2020 will be accelerated, so that the women's state pension age reaches 65 by November 2018; the Act introduced amendments to primary legislation to amend the regulatory framework for the duty on employers to automatically enrol eligible workers into a qualifying pension scheme and to contribute to the scheme. These measures implemented recommendations from the Making Automatic Enrolment Work review and revised some of the automatic enrolment provisions in the PA 2008.
The Act amended existing legislation that provided for revaluation or indexation of occupational pensions and payments by the Pension Protection Fund. The Act defined "money purchase benefits" for the purpose of pensions law; this was a consequence of the judgment of the Supreme Court in Houldsworth v Bridge Trustees and Secretary of State for Work and Pensions. The Act took powers to make transitional, consequential or supplementary provision as well and to make further amendments to the definition of "money purchase benefits"; the Act introduced provisions into the current judicial pension schemes to allow contributions to be taken towards the cost of providing personal pension benefits to members of those schemes. The Act contained a number of measures to correct particular references in the existing body of pensions-related legislation and other small and technical measures to both state and private pension legislation; this included the following measures: increased flexibility in the date of consolidation of additional state pension.
The United Kingdom the United Kingdom of Great Britain and Northern Ireland, sometimes referred to as Britain, is a sovereign country located off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland, many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state, the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world; the Irish Sea lies between Great Ireland. With an area of 242,500 square kilometres, the United Kingdom is the 78th-largest sovereign state in the world, it is the 22nd-most populous country, with an estimated 66.0 million inhabitants in 2017. The UK is constitutional monarchy; the current monarch is Queen Elizabeth II, who has reigned since 1952, making her the longest-serving current head of state.
The United Kingdom's capital and largest city is London, a global city and financial centre with an urban area population of 10.3 million. Other major urban areas in the UK include Greater Manchester, the West Midlands and West Yorkshire conurbations, Greater Glasgow and the Liverpool Built-up Area; the United Kingdom consists of four constituent countries: England, Scotland and Northern Ireland. Their capitals are London, Edinburgh and Belfast, respectively. Apart from England, the countries have their own devolved governments, each with varying powers, but such power is delegated by the Parliament of the United Kingdom, which may enact laws unilaterally altering or abolishing devolution; the nearby Isle of Man, Bailiwick of Guernsey and Bailiwick of Jersey are not part of the UK, being Crown dependencies with the British Government responsible for defence and international representation. The medieval conquest and subsequent annexation of Wales by the Kingdom of England, followed by the union between England and Scotland in 1707 to form the Kingdom of Great Britain, the union in 1801 of Great Britain with the Kingdom of Ireland created the United Kingdom of Great Britain and Ireland.
Five-sixths of Ireland seceded from the UK in 1922, leaving the present formulation of the United Kingdom of Great Britain and Northern Ireland. There are fourteen British Overseas Territories, the remnants of the British Empire which, at its height in the 1920s, encompassed a quarter of the world's land mass and was the largest empire in history. British influence can be observed in the language and political systems of many of its former colonies; the United Kingdom is a developed country and has the world's fifth-largest economy by nominal GDP and ninth-largest economy by purchasing power parity. It has a high-income economy and has a high Human Development Index rating, ranking 14th in the world, it was the world's first industrialised country and the world's foremost power during the 19th and early 20th centuries. The UK remains a great power, with considerable economic, military and political influence internationally, it is sixth in military expenditure in the world. It has been a permanent member of the United Nations Security Council since its first session in 1946.
It has been a leading member state of the European Union and its predecessor, the European Economic Community, since 1973. The United Kingdom is a member of the Commonwealth of Nations, the Council of Europe, the G7, the G20, NATO, the Organisation for Economic Co-operation and Development and the World Trade Organization; the 1707 Acts of Union declared that the kingdoms of England and Scotland were "United into One Kingdom by the Name of Great Britain". The term "United Kingdom" has been used as a description for the former kingdom of Great Britain, although its official name from 1707 to 1800 was "Great Britain"; the Acts of Union 1800 united the kingdom of Great Britain and the kingdom of Ireland in 1801, forming the United Kingdom of Great Britain and Ireland. Following the partition of Ireland and the independence of the Irish Free State in 1922, which left Northern Ireland as the only part of the island of Ireland within the United Kingdom, the name was changed to the "United Kingdom of Great Britain and Northern Ireland".
Although the United Kingdom is a sovereign country, Scotland and Northern Ireland are widely referred to as countries. The UK Prime Minister's website has used the phrase "countries within a country" to describe the United Kingdom; some statistical summaries, such as those for the twelve NUTS 1 regions of the United Kingdom refer to Scotland and Northern Ireland as "regions". Northern Ireland is referred to as a "province". With regard to Northern Ireland, the descriptive name used "can be controversial, with the choice revealing one's political preferences"; the term "Great Britain" conventionally refers to the island of Great Britain, or politically to England and Wales in combination. However, it is sometimes used as a loose synonym for the United Kingdom as a whole; the term "Britain" is used both as a synonym for Great Britain, as a synonym for the United Kingdom. Usage is mixed, with the BBC preferring to use Britain as shorthand only for Great Britain and the UK Government, while accepting that both terms refer to the United K
United Kingdom labour law
United Kingdom labour law regulates the relations between workers and trade unions. People at work in the UK benefit from a minimum charter of employment rights, which are found in various Acts, common law and equity; this includes the right to a minimum wage of £7.83 for over 25-year-olds under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, attempts to limit excessively long working hours; the Employment Rights Act 1996 gives the right to leave for child care, the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995. To get fair labour standards beyond the minimum, the most important right is to collectively participate in decisions about how an enterprise is managed; this works through collective bargaining, underpinned by the right to strike, a growing set of rights of direct workplace participation.
Workers must be able to vote for trustees of their occupational pensions under the Pensions Act 2004. In some enterprises, such as universities, staff can vote for the directors of the organisation. In enterprises with over 50 staff, workers must be informed and consulted about major economic developments or difficulties; this happens through a increasing number of work councils, which must be requested by staff. However, the UK remains behind European standards in requiring all employees to have a vote for their company's board of directors, alongside private sector shareholders, or government authorities in the public sector. Collective bargaining, between democratically organised trade unions and the enterprise's management, has been seen as a "single channel" for individual workers to counteract the employer's abuse of power when it dismisses staff or fix the terms of work. Collective agreements are backed up by a trade union's right to strike: a fundamental requirement of democratic society in international law.
Under the Trade Union and Labour Relations Act 1992 strikes are lawful if they are "in contemplation or furtherance of a trade dispute". As well as having rights for fair treatment, the Equality Act 2010 requires that people are treated unless there is a good justification, based on their gender, sexual orientation and age. To combat social exclusion, employers must positively accommodate the needs of disabled people. Part-time staff, agency workers, people on fixed-term contracts are treated equally compared to full-time or permanent staff. To tackle unemployment, all employees are entitled to reasonable notice before dismissal after a qualifying period of a month, after two years they can only be dismissed for a fair reason, are entitled to a redundancy payment if their job was no longer economically necessary. If an enterprise is bought or outsourced, the Transfer of Undertakings Regulations 2006 require that employees' terms cannot be worsened without a good economic, technical or organisational reason.
The purpose of these rights is to ensure people have dignified living standards, whether or not they have the relative bargaining power to get good terms and conditions in their contract. Labour law in its modern form is a creation of the last three decades of the 20th century. However, as a system of regulating the employment relationship, labour law has existed since people worked. In feudal England, the first significant labour laws followed the Black Death. Given the shortage of workers and consequent price rises the Ordinance of Labourers 1349 and the Statute of Labourers 1351 attempted to suppress sources of wage inflation by banning workers organisation, creating offences for any able-bodied person that did not work, fixing wages at pre-plague levels; this led to the Peasants' Revolt of 1381, in turn suppressed and followed up with the Statute of Cambridge 1388, which banned workers from moving around the country. Yet conditions were improving. One sign was the beginning of the more enlightened Truck Acts, dating from 1464, that required that workers be paid in cash and not kind.
In 1772 slavery was declared to be illegal in R v Knowles, ex parte Somersett, the subsequent Slave Trade Act 1807 and Slavery Abolition Act 1833 enforced prohibition throughout the British Empire. The turn into the 19th century coincided with the start of the massive boom in production. People's relationship to their employers moved from one of status - formal subordination and deference - to contract whereby people were formally free to choose their work. However, freedom of contract did not, as the economist Adam Smith observed, change a worker's factual dependency on employers; as its height, the businesses and corporations of Britain's industrial revolution organised half the world's production across a third of the globe's surface and a quarter of its population. Joint Stock Companies, building railways and factories, manufacturing household goods, connecting telegraphs, distributing coal, formed the backbone of the laissez faire model of commerce. Industrialisation meant greater urbanisation, miserable conditions in the factories.
The Factory Acts dating from 1803 required minimum standards on hours and conditions of working children. But people were attempting to organise more formally. Trade unions were suppressed following the French Revolution of 1789 under the Combination Act 1799; the Master and Servant Act 1823 and subsequent updates stipulated that all workmen were subject to criminal penalties for disobedience, calling for strikes was punished as a
Taxation in the United Kingdom
Taxation in the United Kingdom may involve payments to at least three different levels of government: central government, devolved governments and local government. Central government revenues come from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come from grants from central government funds, business rates in England, Council Tax and from fees and charges such as those for on-street parking. In the fiscal year 2014–15, total government revenue was forecast to be £648 billion, or 37.7 per cent of GDP, with net taxes and National Insurance contributions standing at £606 billion. A uniform Land tax was introduced in England during the late 17th century, formed the main source of government revenue throughout the 18th century and the early 19th century. Income tax was announced in Britain by William Pitt the Younger in his budget of December 1798 and introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic Wars.
Pitt's new graduated income tax began at a levy of 2 old pence in the pound on annual incomes over £60, increased up to a maximum of 2 shillings on annual incomes of over £200. Pitt hoped that the new income tax would raise £10 million, but receipts for 1799 totalled just over £6 million. Income tax was levied under five schedules. Income not falling within those schedules was not taxed; the schedules were: Schedule A Schedule B Schedule C Schedule D Schedule E Later, Schedule F was added. Pitt's income tax was levied from 1799 to 1802, when it was abolished by Henry Addington during the Peace of Amiens. Addington had taken over as prime minister in 1801; the income tax was reintroduced by Addington in 1803 when hostilities recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo. Considerable controversy was aroused by the malt, house and income taxes; the malt tax was easy to collect from brewers. The house tax hit London town houses; the income tax was reintroduced by Sir Robert Peel in the Income Tax Act 1842.
Peel, as a Conservative, had opposed income tax in the 1841 general election, but a growing budget deficit required a new source of funds. The new income tax of 7d in the pound, based on Addington's model, was imposed on annual incomes above £150; the war was financed by borrowing large sums at home and abroad, by new taxes, by inflation. It was implicitly financed by postponing maintenance and repair, canceling capital expenditure; the government avoided indirect taxes because they raised the cost of living, caused discontent among the working class. There was a strong emphasis on being "fair" and being "scientific"; the public supported the heavy new taxes, with minimal complaints. The Treasury rejected proposals for a stiff capital levy, which the Labour Party wanted to use to weaken the capitalists. Instead, there was an excess profits tax, of 50% on profits above the normal prewar level. Excise taxes were added on luxury imports such as automobiles and watches. There was no sales value added tax.
The main increase in revenue came from the income tax. 6d in the pound, individual exemptions were lowered. The income tax rate increased to 5s. In 1916, 6s. In 1918. Altogether, taxes provided at most 30% of national expenditure, with the rest from borrowing; the national debt soared from £625 million to £7,800 million. Government bonds paid 5% p.a. Inflation escalated so that the pound in 1919 purchased only a third of the basket it had purchased in 1914. Wages were laggard, the poor and retired were hard hit. Britain's income tax has changed over the years, it taxed a person's income regardless of, beneficially entitled to that income, but now tax is paid on income to which the taxpayer is beneficially entitled. Most companies were taken out of the income tax net in 1965; these changes were consolidated by the Income and Corporation Taxes Act 1970. The schedules under which tax is levied have changed. Schedule B was abolished in 1988, Schedule C in 1996 and Schedule E in 2003. For income tax purposes, the remaining schedules were superseded by the Income Tax Act 2005, which repealed Schedule F.
For corporation tax purposes, the Schedular system was repealed and superseded by the Corporation Tax Acts of 2009 and 2010. The highest rate of income tax peaked in the Second World War at 99.25%. This was reduced after the war and was around 97.5 percent through the 1950s and 60s. In 1971, the top rate of income tax on earned income was cut to 75%. A surcharge of 15% on investment income kept the overall top rate on that income at 90%. In 1974 the top tax rate on earned income was again raised, to 83%. With the investment income surcharge this raised the overall top rate on investment income to 98%, the highest permanent rate since the war; this applied to incomes over £20,000. In 1974, as many as 750,000 people were liable to pay the top rate o
Labour Party (UK)
The Labour Party is a centre-left political party in the United Kingdom, described as an alliance of social democrats, democratic socialists and trade unionists. The party's platform emphasises greater state intervention, social justice and strengthening workers' rights; the Labour Party was founded in 1900, having grown out of the trade union movement and socialist parties of the nineteenth century. It overtook the Liberal Party to become the main opposition to the Conservative Party in the early 1920s, forming two minority governments under Ramsay MacDonald in the 1920s and early 1930s. Labour served in the wartime coalition of 1940-1945, after which Clement Attlee's Labour government established the National Health Service and expanded the welfare state from 1945 to 1951. Under Harold Wilson and James Callaghan, Labour again governed from 1964 to 1970 and 1974 to 1979. In the 1990s Tony Blair took Labour closer to the centre as part of his "New Labour" project, which governed the UK under Blair and Gordon Brown from 1997 to 2010.
After Corbyn took over in 2015, the party has moved leftward. Labour is the Official Opposition in the Parliament of the United Kingdom, having won the second-largest number of seats in the 2017 general election; the Labour Party is the largest party in the Welsh Assembly, forming the main party in the current Welsh government. The party is the third largest in the Scottish Parliament. Labour is a member of the Party of European Socialists and Progressive Alliance, holds observer status in the Socialist International, sits with the Progressive Alliance of Socialists and Democrats in the European Parliament; the party includes semi-autonomous Scottish and Welsh branches and supports the Social Democratic and Labour Party in Northern Ireland. As of 2017, Labour had the largest membership of any party in Western Europe; the Labour Party originated in the late 19th century, meeting the demand for a new political party to represent the interests and needs of the urban working class, a demographic which had increased in number, many of whom only gained suffrage with the passage of the Representation of the People Act 1884.
Some members of the trades union movement became interested in moving into the political field, after further extensions of the voting franchise in 1867 and 1885, the Liberal Party endorsed some trade-union sponsored candidates. The first Lib–Lab candidate to stand was George Odger in the Southwark by-election of 1870. In addition, several small socialist groups had formed around this time, with the intention of linking the movement to political policies. Among these were the Independent Labour Party, the intellectual and middle-class Fabian Society, the Marxist Social Democratic Federation and the Scottish Labour Party. At the 1895 general election, the Independent Labour Party put up 28 candidates but won only 44,325 votes. Keir Hardie, the leader of the party, believed that to obtain success in parliamentary elections, it would be necessary to join with other left-wing groups. Hardie's roots as a lay preacher contributed to an ethos in the party which led to the comment by 1950s General Secretary Morgan Phillips that "Socialism in Britain owed more to Methodism than Marx".
In 1899, a Doncaster member of the Amalgamated Society of Railway Servants, Thomas R. Steels, proposed in his union branch that the Trade Union Congress call a special conference to bring together all left-wing organisations and form them into a single body that would sponsor Parliamentary candidates; the motion was passed at all stages by the TUC, the proposed conference was held at the Memorial Hall on Farringdon Street on 26 and 27 February 1900. The meeting was attended by a broad spectrum of working-class and left-wing organisations—trades unions represented about one third of the membership of the TUC delegates. After a debate, the 129 delegates passed Hardie's motion to establish "a distinct Labour group in Parliament, who shall have their own whips, agree upon their policy, which must embrace a readiness to cooperate with any party which for the time being may be engaged in promoting legislation in the direct interests of labour." This created an association called the Labour Representation Committee, meant to co-ordinate attempts to support MPs sponsored by trade unions and represent the working-class population.
It had no single leader, in the absence of one, the Independent Labour Party nominee Ramsay MacDonald was elected as Secretary. He had the difficult task of keeping the various strands of opinions in the LRC united; the October 1900 "Khaki election" came too soon for the new party to campaign effectively. Only 15 candidatures were sponsored. Support for the LRC was boosted by the 1901 Taff Vale Case, a dispute between strikers and a railway company that ended with the union being ordered to pay £23,000 damages for a strike; the judgement made strikes illegal since employers could recoup the cost of lost business from the unions. The apparent acquiescence of the Conservative Government of Arthur Balfour to industrial and business interests intensified support for the LRC against a government that appeared to have little concern for the industrial proletariat and its problems. In the 1906 election, the LRC won 29 seats—helped by a secret 1903 pact between Ramsay MacDonald and Liberal Chief Whip Herbert Gladstone that aimed to avoid splitting the opposition vote between Labour and Liberal candidates in the interest of removing the Conservatives from office.
In their first meeting after the election the group's Members of Parliament decided to adop