§ 23. Mr. GoodmanTo ask the Secretary of State for Work and Pensions if he will make a statement about the Green Paper on Pensions, with special reference to plans for state pensions. [89722]
§ Mr. McCartneyThe Green Paper, "Simplicity, security and choice, working and saving for retirement" (Cm 5677), set out our proposals to simplify 363W occupational and private pensions saving and make flexible retirement easier, following our earlier reforms to state provision and to financial services. Our proposals will enable people to make informed choices about their retirement provision, building on the foundation of state pension support. As the Green Paper explained, we have already taken action to reform the system of state support for pensioners, focussing in particular on tackling pensioner poverty. Specifically, we introduced the Minimum Income Guarantee (MIG) which is currently worth £98.15 a week for single pensioners and £149.80 for couples. Around 2.1 million people in the UK are benefiting from the MIG now.
From October this year the MIG is being subsumed by the more generous Pension Credit which will reward pensioners with savings, second pensions or earnings, yielding incomes up to £139 a week for single pensioners and nearly £204 a week for couples. In addition we brought in the State Second Pension from April 2002 to boost the pension rights of low and moderate earners and bring in groups of non-workers for the first time. Around 4.5 million low earners will build up an additional State Pension worth at least twice what SERPS would have provided. Two million carers and two million disabled people also build up pension rights for the first time. Also, from this April the basic State Pension will be worth £77.45 a week for single pensioners which is a 7 per cent. real terms increase since 1997. And in future years we are committed to increasing the basic State Pension by at least 2.5 per cent., even if the Retail Price Index (RPI) is below this.
Other measures we introduced include free TV licences for those aged over 75, which benefits four million households and Winter Fuel payments now worth £200 each year for eligible households. Around 11 million people benefited from Winter Fuel payments for winter 2001–02. We considered that this state support for pensioners we have put in place provides the right foundation for retirement. We were not persuaded by calls to increase State Pension age for a number of reasons, including that such a change would have a disproportionate effect on the poorest pensioners. We are currently consulting on the proposals in the Green Paper.