Treasury Minister wants 'national conversation' about Manx National Insurance Fund

Follows report from UK Government Actuary

The Treasury Minister says he wants to start a 'national conversation' about the long-term future and sustainability of the Manx National Insurance Fund.

It's as a report, published in February last year, warns the fund will be exhausted in just over twenty years' time.

The Fund - which currently stands at £1.07billion -  is topped up each year by the amount left over after National Insurance contributions from working people have paid for the majority of benefits and state pensions. 

It's been in place since 1948, but government says life expectancy has since increased and people are claiming their state pensions for longer.

Over the coming years, Treasury says, forecasts show that that there will no longer be a surplus available to pay into the Fund.

The warning is that, instead, the situation will reverse, with money needing to be withdrawn from the Fund in order to make up a shortfall in NI contributions.

Government has outlined some proposals, including replacing the ‘triple lock’ policy – which increases pensions each year by whichever is the highest figure: 2.5 percent, CPI inflation, or average earnings growth – with another way to increase pensions each year in line with inflation.

Any change would only affect those who reached state pension age after 5 April 2019.

In his Budget speech this year Treasury Minister Dr Alex Allinson said: 'In my view [the triple lock] is not sustainable in the long-term without putting increased pressure on those who pay National Insurance and I don’t think that this is fair.

'I will be coming back to this Honourable Court for a full debate on our review of the National Insurance Fund, and how we protect it and the livelihoods of those depending on it whilst ensuring we promote intergenerational fairness.'

Treasury says it is in the process of 'exploring the paths available' to address the future funding issues.

A document highlighting the situation and options available has been published. and you can find it HERE.

Of the document, Minister Allinson says: 'This sets out some of the options that Treasury has been considering to address the long-term funding issues that the Scheme is facing.

'I believe we need a national conversation about how we preserve the long-term future of our state pension system both for the pensioners of today, and of tomorrow.

'Over the coming months I will be engaging with Tynwald Members to develop a plan that will ensure the long-term sustainability of the current scheme.  A further report will be provided prior to next year’s Budget.'