Old Age Pensions Act 1908

Old Age Pensions Act 1908

The Old Age Pension was a cornerstone of Liberal Policy and had been a major part of their election campaign pledges. The Pension would provide income for the elderly. It would revolutionise the way in which the state dealt with the needs of older members of society.

The Old Age pension was not a new idea, despite what Lloyd George suggests in the quote below. It had been mooted by Thomas Paine in his book, the Rights of Man and a scheme was introduced in Prussia under Bismarck. However, it was a major change in the United Kingdom.

“You have never had a scheme of this kind tried in a great country like ours, with its thronging millions, with its rooted complexities… This is, therefore, a great experiment… We do not say that it deals with all the problem of unmerited destitution in this country. We do not even contend that it deals with the worst part of that problem. It might be held that many an old man dependent on the charity of the parish was better off than many a young man, broken down in health, or who cannot find a market for his labour.” David Lloyd George, June 1908.

David Lloyd George

The Old Age Pension set out by the Liberals was as follow:

  • Individuals over the age of 70: 5 Shillings per week
  • Couples over the age of 70: 7 Shillings 5 Pence per week

What’s that worth today? There were 20 Shillings in an Imperial Pound. 12 Pence in a Shilling. Not taking inflation into account that is 37 Pence per week for Couples. Annually that is £19.24. The calculator below shows how inflation would change this into modern £) 

Funding Old Age Pensions

The introduction of the scheme would place the Treasury under a huge financial burden. Suddenly it had to find large sums of money to pay the Old Age Pensions with. Lloyd George introduced a ‘Peoples Budget’ to raise the £16 million per annum required. In this budget Lloyd George changed the rate of tax. For low incomes, tax was set at 9d (pence) in the pound. Incomes of £3000-4999 had a new rate of tax at 1s 2d. A ‘super-tax’ was introduced for people who had an income of £5000 or more, this added a further 6d to tax per pound.

Additional taxes were proposed on the sale of land and on inheritance. These taxes were opposed by the Conservative and Unionist Parties. The House of Lords, with a huge Conservative majority, voted against the Budget as a result of these proposals. In doing so a constitutional crisis began that culminated in the power of the House of Lords being reduced.


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Trade Disputes Act 1906Workmens Compensation Act 1906Merchant Shipping Act 1906
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Coal Mines Regulation Act 1908Children's and Young Persons Act (Children's Charter) 1908Old Age Pensions Act 1908
Labour Exchange Act 1909Trade Board Act 1909Housing and Town Planning Act 1909
National Insurance Act 1911Shops Act 1911Coal Mines (Minimum Wage) Act 1912