§ Maria Eagle
SERPS has served many people well but, because it is purely earnings-related, people on the lowest earnings gain least, and carers and disabled people who cannot work, or earn very little, get nothing at all.
When state second pension is launched on 6 April, 18 million people will start to build up bigger pension entitlements. Some 4.5 million low-paid employees (those earning up to £10,800 in 2002–03) will get at least twice as much additional pension as a person earning £10,800 would have got from SERPS. In addition 2 million qualifying carers and a similar number of long-term disabled people with broken work records will benefit from state second pension. They will be treated, for state second pension purposes, as if they had annual earnings at the low earnings threshold, £10,800 for 2002–03.234W
State second pension will also deliver better pensions for 9.5 million moderately paid employees—those earning between £10,800 and £24,600 (in 2002–03 terms).
Employees earning more than £24,600 will get equivalent benefits to those provided by SERPS.
Enhanced national insurance rebates and state second pension "top-ups" will ensure that low and moderately paid employees who are contracted-out into private pensions will also benefit from the reforms.
In addition, we plan that the savings credit element of the pension credit will reward people with second pensions, including state second pension.