§ Mr. Jim CunninghamTo ask the Secretary of State for Work and Pensions if he will make a statement on the second state pension, how to qualify for it and the future of SERPS. [19365]
§ Mr. McCartney[holding answer 3 December 2001]From 6 April 2002, the State Second Pension reforms SERPS to boost the state additional pension of low earners, and allow qualifying carers and long-term disabled people to build up an additional pension. People accruing SERPS will automatically start to accrue State Second Pension. Already accrued SERPS rights will be fully protected.
The reforms introduce a Low Earnings Threshold (£10,400 in today's terms). Employees earning up to the threshold will have their additional pension calculated as 431W if they earned at that level. In addition, the amount of additional pension they receive will be twice the amount that they would have got from SERPS.
Qualifying carers who look after a young child, or a sick or disabled person at home, and disabled people who have lost their link with the labour market will also be treated for additional pension purposes as if they had earnings at the threshold.
Employees earning up to about £23,600 (in today's terms) will also benefit from the reforms, with the amount of extra help tapering off as earnings rise.
Those earning above about £23,600 (in today's terms) will receive the same from the State Second Pension as they would have done from SERPS.