Liberal Democrats to increase pensions, basic state pension to increase to over £100 (Birmingham Liberal Democrats)

Birmingham Liberal Democrats <info@birminghamlibdems.org.uk>

Liberal Democrats to increase pensions, basic state pension to increase to over £100

September 7, 2004 1:24 PM

The Rt. Hon. Charles Kennedy MP, Leader of the Liberal Democrats has today unveiled the Liberal Democrats new pension policies. Single pensioners over 75 will have an extra £25 a week on their pension and couples over 75 would have an extra £33.70 a week. The plans will also lift a million people out of means testing overnight.

Based on residency rather than National Insurance contributions, the Citizen's Pension will particularly benefit women, who will no longer be penalised for caring for their children at home or be reliant on their husband's pension. In the first term of a Liberal Democrat Government, the Citizen's Pension will be targeted at the over 75s who tend to be the poorest, the majority of whom are women. The policy will later be extended to all pensioners.

The Citizen's Pension will rise in line with average earnings so that all pensioners could share in the growing wealth of the nation. It would be set at £105.45 for single pensioners and £160.95 for couples. The cost of the policy will be £2.7 Billion and will be met through the abolition of the DTI. The extra money that is required in the first Parliament will come from slimming down central government.

The policy would also take radical steps in the area of occupational and private pensions. Plans would include:

SIMPLFYING SAVING - making occupational schemes "opt out" schemes rather than "opt in" schemes so that employees have to make a conscious decision not to save in the scheme;

FAIRER PENSIONS - righting an historic injustice. The current system is stacked against women who stay at home to care for their children and/or work part time and who have patchy NI contributions. Based on residency, the Citizen's Pension particularly benefits women;

REDUCING THE SAVINGS GAP - slashing means-testing and ensuring that every penny saved is a penny better off;

OFFERING CHOICE - removing the requirement to buy an annuity at 75, so that people can decide for themselves how to use their savings;

TRUST IN PENSIONS - offering new, low-cost pensions run by National Savings;

SIMPLE GUIDANCE - establishing a kitemark system for occupational pensions so that all employees and job applicants can see the rating that a company's scheme has been given.

The pension policy is the first of a number of plans from the Liberal Democrats to enable an active and dignified retirement. Launching the policy, Charles Kennedy MP, Leader of the Liberal Democrats, said "This is about fairness for all pensioners. Overnight we will lift one million pensioners out of means testing and we will ensure an extra £25 a week on the basic state pension for single pensioners. Many pensioners are missing out on a decent pension because of the complexity of the Government's Pension Credit. Our Citizen's Pension will give people a decent pension as a right without needless form filling and bureaucracy. There is a lack of confidence in the pensions system. Today's measures will restore faith in pensions as a way of saving for retirement."

Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary, said "The Government has made a mess of pensions. These measures provide dignity for all pensioners whilst creating a simple and flexible framework for those who save in occupational and private schemes. Offering a generous state pension which does not lose its value means that in one fell swoop one million pensioners are taken out of means-tested benefits. Women, who have for so long been the poor relation in terms of their pension rights, will also benefit. They will no longer get penalised for caring for their children at home or have to be reliant on their husband's pension. The present system is too complex and rigid. The pensions system should be simple and secure so that people can make informed choices and know that their money is safe.