Separate Scotland faces a ‘pensions time bomb’

AN independent Scotland would struggle to fund the basic state pension, according to latest figures.

Official data shows that the population is ageing faster than expected.

A surge in the number of people retiring is not being matched by extra taxpayers finding jobs. That has left Scotland with fewer taxpayers per pensioner than the rest of the UK and has led to fears of a ‘pensions time bomb’.

The Office for National Statistics figures show the number of pensioners in Scotland has risen from 793,000 to 836,000 since 2012, up 5.4 per cent. But the workforce increased by only 3.5 per cent, from 2.49 million to 2.57 million.

Thus, the ratio of 3.14 taxpayers for every pensioners fell to 3.08.

In England, the number of pensioners rose from 7.76 million to 8.06 million, up 3.9 per cent. But there was a 4.2 per cent rise in the workforce, from 24.58 million to 25.61 million. So the ratio of taxpayers to pensioners is 3.18, up from 3.17.

Scottish Tory finance spokesman Gavin Brown said this was ‘a powerful argument for staying in the Union’.

He added: ‘The crucial issue around Scottish pensions in the future is this: can we really afford them?

‘If an independent Scotland cannot foot the bill, what will it do? Are Ministers planning to cut the old age pension? Or will they raise income tax or do they think it would be best to borrow billions of pounds to plug the gap?

‘We need the answer to these questions as a matter of urgency.’

A Scottish Government spokesman said: ‘All Western countries face rising pension costs due to ageing populations.

‘Pensions will be fully protected in an independent Scotland and paid in full and on time, as now.

‘Social protection spending, which includes pensions and welfare, is more affordable in Scotland than in the rest of the UK – and has been lower for the last five years.’