HC Deb 06 March 2000 vol 345 cc761-2
15. Mr. Peter Luff (Mid-Worcestershire)

If he will make a statement on his proposals for a state second pension. [111846]

The Minister of State, Department of Social Security (Mr. Jeff Rooker)

The state second pension will reform SERPS to give more help to those who need it most—low earners, carers and the long-term disabled. Those earning below £9,500 a year on this year's figures will be treated as if they had earned that amount. There will be considerable extra help for moderate earners. Anyone who works throughout their working life or has periods of caring or disability will retire on an income well above the level of the minimum income guarantee.

Mr. Luff

The Minister says that anyone who works throughout his entire working life will retire on an income above the level of the minimum income guarantee. How long will it take someone who earns less than £9,500 a year—the new figure that the Minister announced today—to obtain enough credits to attain that income?

Mr. Rooker

The system will assume that anyone who earns less than £9,500 is earning that sum. Much of the gain for low earners derives from that; they will obtain a low-earners boost. As long as they earn more than the lower earnings level of the national insurance system, which is around £3,500, it will be assumed that they earn £9,500. Two million carers, 2 million people with long-term disability, and between 10 and 14 million low and moderate earners will gain.

We are considering a pension, so the accruals will take time to build up. However, on the state second pension, people who work throughout their lives will retire on an income that is above the minimum income guarantee. As I said earlier, people will be treated as individuals. Income support and the minimum income guarantee are means-tested on the basis of couples' incomes. As everyone knows, income support and minimum income guarantee levels for a couple are not twice those for a single person.