THE Scottish Government’s plans for pensions in an independent Scotland amount to the “biggest mis-selling scandal in history”, according to the chairman of the Scottish Affairs Committee.
A report by the committee said the Scottish Government has failed to properly cost its plans for both public and private pensions.
It also cast “serious doubts” on whether a separate Scotland could set up a new benefits system by 2018, saying the time frame is “unrealistic”.
The committee found that the Scottish Government’s stated plans to consider delaying the increase in the pension age to 67 and to pay a proposed higher starting rate than the rest of the UK are almost entirely uncosted.
It called on the Holyrood administration to give a clear proposal for a future pension age and the full price of their plans before the referendum, so that current and future pensioners can judge how much more expensive they would be.
The Committee also heard evidence that the proposed Scottish version of the UK Government’s National Employment Savings Trust (Nest) would fail to match the value for money of the current UK system and could take a long time to set up.
Ian Davidson MP, chair of the committee, said: “The only thing definite about the Scottish Government’s welfare policies is uncertainty.
“They cannot say what their pensions bill would be. They have no credible plans to cope with the rising costs of Scotland’s ageing population. They don’t know what their own promises would cost.
“Pensioners - current and future - deserve certainty. Instead the Scottish Government offer no detail, no costings, no believable plan and what they are offering amounts to the biggest mis-selling scandal in history.
“Without any Scottish Government plan, no Scot is able to plan for their pension after separation.
“They are asking the people of Scotland to leave the strength of the pooling and sharing of resources in the UK for a future they cannot even begin to detail after separation.”
The committee said that many public pension schemes are not currently funded up to sufficient levels to cover all their commitments so the UK Government steps in with additional funding.
Its report found that the Scottish Government has failed to make clear how much it would cost Scotland to bear these costs after separation.
On working age benefits, the report found that the Scottish Government’s plans have failed to acknowledge the costs and complexities of disentangling Scottish claimants from the UK welfare system.
It also said that the Scottish Government’s plans to run two parallel systems in a transition period to separation are infeasible.
A Scottish Government spokeswoman said: “Scotland’s Future set out our proposals for an affordable, fair and efficient pensions system in an independent Scotland. The fact is that social protection spending, which includes pensions and welfare, is more affordable in Scotland than in the rest of the UK - and has been so for the last five years.
“As this report acknowledges, the proposals from the Scottish Government would provide a more ‘generous’ pension in Scotland, helping Scotland’s pensioners with a guaranteed pension of £160 a week from 2016-17, a triple lock and the continuation of savings credit.
“Scotland’s pensioners are being short-changed. If we stay tied to the Westminster pension and welfare system, and the state pension age rises at the same pace in Scotland as in the rest of the UK, the risk is that this problem will be compounded.
“That is why it is right for Scotland to consider a state pension age relatively lower than the rest of the UK.
“As Stirling University has set out, individual pensions in Scotland are between 6 per cent to 8 per cent cheaper compared to the rest of the UK.
“The Stirling team also noted that if Scotland remained in the UK, pensioners would be part of a pensions contract that would be ‘actuarially unfair’.”