HC Deb 06 March 2002 vol 381 cc410-1W
Mr. Webb

To ask the Secretary of State for Work and Pensions if he will estimate by how much it would be possible to raise the basic state pension for the over-75s, on a revenue neutral basis, and taking account of offsetting savings in expenditure on means-tested benefits and enhanced income tax revenue, if he were not to introduce the pension credit and were instead to spend the money on the state pension for the over-75s. [27687]

Mr. McCartney

Diverting £2 billion away from the state pension credit to increasing the basic state pension (BSP) for the over-75s would mean standard rate BSP could rise from £72.50 to £87.55 per week for the over-75s. Approximately 75 per cent. of pensioners aged 75 and over who were previously entitled to the minimum income guarantee would remain on the means tested benefits (MIG) if BSP was increased to £87.55 and because this is lower than the current MIG level they would be no better off.

Also, millions of pensioners living on low or moderate incomes, who struggled to put money aside for their retirement, would find themselves little or no better off than people who had saved nothing. Over 4 million pensioners would no longer receive a reward for any savings that lifted their incomes above the minimum income guarantee. In addition, the upper capital limit of £12,000 and the assumed rate of return of £1 in every £250 would be retained. By introducing pension credit we will tackle poverty among today's pensioners, while not discouraging future pensioners from saving.