Welcome news from Vince Cable on pensions

The BBC reports:

The government is planning a “very radical” overhaul of the state pension, Business Secretary Vince Cable says…

Mr Cable, speaking to BBC One’s Breakfast, said the government wanted to “get away from what we’ve had for the past quarter of a century where state pensions have fallen behind the rest of the economy”.

“What [Pensions Minister] Steve Webb and his colleagues want to do is to particularly protect the position of women, who because they weren’t covered by contributions don’t have a proper state pension,” he said.

Women frequently fail to qualify for the full basic state pension because they have stopped working to raise children and therefore lack enough National Insurance contributions.

You can read the full report here.

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23 Comments

  • mmm I have mixed views on this to be honest.

    Whilst I welcome Pension’s being raised from Single person: £97.65 to £140.00 a week

    I think they are better off to keep using the current system of a, basic state Pension and then Top Up’s with Pension Credit’s which is currently Means Tested.

    I am aware that there is currently millions of pounds being UNCLAIMED in Pension Credits, however this means tested benefit has been fully costed and i think it could be used for other purposes as well.

    I think access to the winter fuel allowance, free bus passes and TV Licences should be incorporated into the means test, rather than being Universal.

    The Government should use some of the money that is currently being unclaimed, to provide better funding for Organisations like Age Concern, So they are able to offer more support to people who are having troubles understanding these forms.

    It makes no sense to me when we are making such savage cuts to other departments and whilst we are whacking disabled and single parents, That would should be increasing ALL Pensioners, (The one’s with generous private pensions and substantial savings) with a further £2k a year

    It isn’t fair when we are potentially going to reduce people’s Housing Benefit by £40 a week and put some people at risk of losing their home, and then putting that £40 into the pocket of a Wealthy Pensioner who can afford to spend 6 months of the year living in porter benus.

    It is also unfair to make people no longer eligible for ESA if they have assets of over 16k

    But then give £2000 a year to a wealthy pensioner, with a holiday home abroad.

  • Great news!!!
    A half decent Pension at last!
    Means testing done away with GREAT.
    Rock n Roll!

    Labour wont like this ….. they love people coming cap in hand & to depend on complex benefits.

  • I can’t help but notice that the coalition is cutting spending on children and increasing spending on pensioners.

    Is it acting on the assumption that people will vote to be given money at the expense of their grandchildren?

  • In reply to Mat – I want the free bus pass – winter fuel allowance – free TV licence all to go – I want a decent Pension so people can make their own choices & have the money (via their Pension) to do so.

    ‘You may say I’m a dreamer … but I’m not the only one’ – Hummm a good line for a song?

  • This would be great news if it wasn’t for the fact that it’s only a possibility (unlike the pension age going up which is a reality) and it won’t happen for FIVE years maybe not until after the next election.
    Maybe it’s just me but I’m getting very tired of all this Blairite policy spin coming out of Number 10.

  • So let me get this straight. I’ve never been unemployed in my life, I earn a good (but not massive salary) and now the Government intend to raid SERPS to top up the basic pension?

    Sorry but some people have never worked in their life and will get a nice pension boost. I want to move my entire SERPS savings into a private scheme if this happens.

    This better not be some progressive scheme designed to hurt the middle classes and boost the workshy.

  • Tony Dawson 25th Oct '10 - 7:51pm

    Just how ‘official’ a proposal is this? The last thing which Vince gave a ‘pre-publicity’ to (making Lib Dems look ‘all over the place’), the Student Fees rise from the Browne Report, appears to still be a movable feast. Perhaps we should have waited for a clear and detailed announcement to parliament from Steve Webb/IDS which we could properly digest and use politically with confidence?

  • This sounds good but I do have a question as I know little on this subject ..
    Is the current means tested element seen as a ‘gateway benefit’ similar to income support? I’m asking because I’m concerned that it could be given in one hand but taken away with the other via Council tax rebates and such like.

    nige (ex ld)

  • Excellent news, as a Labour supporter, this is more like it. What I would expect from the Lib dems. Praise were it is due.

  • @Christian
    I think the point is that pensions across the the board are too low and any attempt at lifting pensioners out of poverty can only be a good thing, (many old people die in the winter remember because of fuel poverty) and as the article mentions their are many who do not get the full amount through various reasons, not just because they “haven’t worked in their life” as you put it.

  • Patrick Smith 25th Oct '10 - 8:39pm

    The prospect of equal state pensions of £140 per week for all is clearly destined to become a flagship Liberal Democrat policy over the full term of this `Coalition Government’ as it will benefit those who deserve the help most poorest and vulnerable in the community ,namely all pensioners only dependant on this direct fixed income in old age.

    I share my thoughts::

    1.Life expectation rates for men will have risen to 88 years by 2015 and it will help consolidate life in a longer older age enjoyment.

    2.Will the weekly amount trailed of £140 per week today be what will be paid out per pensioner in 2015 when it is mooted that the universal plan will come into effect?

    3.I remain sceptical that the Chancellor`s intention to create the levellling up of men/women retirment line to age 66 is actually the fairest policy on all women who work and raise a family for the majority of working life.

    4.I believe that the extra money should have been found i.e. cut Winter Fuel payments to the higher tax payers .

    5.Women could still be given retirement rights earlier than at 66 years and suggest 62 years would be fairer for the majority .

    4.Certainly there is apparent cross Party unanimity on the issue of increased no-means tested universal State pensions at circa £140 per week.

    5.The Baroness Patricia Hollis has agreed that she is delighted with the proposed `Green Paper ‘ and would support it .

    6.Age Concern and voluntary groups should also be included in all research discussions leading to final policy.

    There is a mark of revolutionary changing up in this potential model for fairer State Pensions reform if the making of this universal State Pensions plan comes to fruition at the highest level to each individual pensioner.

  • This does sound like a very good idea.

    What we have had for many years now is a low Basic State Pension (saves the state money), and a Pension Credit system, formerly Minimum Income Guarantee (costs the state money), and a significantly higher Income Tax Allowance for pensioners (costs the state money).

    I have thought for some time that scrapping (or largely scrapping) the later two could go a fair way towards paying for a substantially increased Basic State Pension.

    If you believe, as I do, that more people need to save more themselves towards their retirement, then the Pension Credit system operates as a major disincentive for many.

  • One other related suggestion, particularly in the light of the recently announced increase in the State Pension age:

    In the same way that people can elect to delay collecting their State Pension, and then receive what I believe are called “Deferred Retirement Increments” then I believe that the reverse should also be available.

    So long as an applicant has a “guaranteed” occupational pension or personal pension in excess of a certain level (so as to avoid subsequent possible claims on state benefits) then why can’t those who have taken early retirement elect to receive their Basic State Pension early, but actuarially reduced?

  • “I can’t help but notice that the coalition is cutting spending on children and increasing spending on pensioners.
    Is it acting on the assumption that people will vote to be given money at the expense of their grandchildren?”

    Is it acting on the assumption that pensioners who will vote should be given money at the expense of their grandchildren, who mostly don’t bother to do so?

  • Could a Citizens’ Income make a comeback to Lib Dem policy.

  • Sorry, I just do not believe that we are going to be better off with this. I suspect that there will be people worse off because of the top ups that are given now. As someone who has just been dealt another body blow by the increase in pension age I am cynical. This government will take from another group to fund this and I suspect it will be the vulnerable again. I have no trust left. This is all academic anyway until al the details are out but I have the awful suspicion that this was ‘leaked’ to try and offset all the criticism of the regressive spending review and that it is something that will be rejected when the time is right. Told you I was cynical.

  • Through the 80’s and into the 90’s my family found it tough with only one wage coming in, three children and housing costs. Nevertheless, we were concerned enough about retaining some dignity in our old age and we elected to continue to pay my spouse’s state pension portion, even though she had stopped work to bring up our children. We went without things to do it. Now we find that perhaps we needn’t have bothered and my kids could have had that extra pair of shoes or school books etc………… I am happy that there will be a decent basic pension for all at last, including women who were single and could not contribute, but there needs to be recognition in some form of those like us that struggled and went without, and what now seems entirely unncessarily.

  • David Wright 26th Oct '10 - 4:52pm

    This was all over The Sun yesterday (no I don’t read it normally, but I saw a copy while waiting in the local takeaway). Funny they never mentioned Vince though; they credited Iain Duncan Smith for it. Though I see today’s online version talks about “Radical plans for reform being drawn up by Work and Pensions Secretary Iain Duncan Smith and Liberal Democrat pensions minister Steve Webb …”.

  • I’m surprised so many people have been taken-in by this story. IF it ever comes in, it will be sometime in the next parliament.

    Those who have swallowed this story 1) should have asked themselves why Vince Cable was announcing it, 2) should look at the timing, and 3) should look at the final comments from the BBC reporter.

    You can fool some of the people all of the time ——- when you give them what they want to hear.

  • By using the headline, “Welcome news from Vince Cable on pensions,” it seems Mark Pack fell for it as well.

    Please – save your time. This was just a story put out to dampen cuts-talk.

  • This is the usual politician’s smoke and mirrors, designed to distract attention rom the debate on cuts etc.., since it is ‘something that might come to be if you vote for us next time’ ‘Be good children and swallow your medicine quietly, and maybe you can have a sweetie sometime’

  • brad winchester 28th Oct '10 - 6:11pm

    at present, i recieve £210.68 per week state pension made up of serps and graduated pension , i dont claim any tax credits or any benefits , what will happen to my pension when this new £140 a week pension comes into force. will i lose £70 a week , i could not afford that and it is not fair as i have paid into it for a better retirement when others have opted out and spent the money . regards b winchester

  • grahame leicester 1st Nov '10 - 3:18pm

    Like Brad I recieve more than the proposed £140 does anyone know out there what will happen to my pension after the reforms I would love a answer

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