§ Mr. HancockTo ask the Secretary of State for Work and Pensions (1) what plans he has to introduce incentives for people to work beyond the age of 60; and if he will make a statement; [129037]
(2) what plans he has to abolish normal retirement ages; if he will make it his policy (a) to increase the state pension and (b) to devise incentives for those who continue in work; and if he will make a statement. [129042]
§ Mr. PondThe Government's Green Paper—"Simplicity, Security and Choice: Working and saving for retirement", (CM5677) issued in December 2002, outlined a number of incentives to help people continue in work up to and over state pension age.
From 2003, we will introduce a package of intensive back to work help for people aged 50 and over including extending the support available through new deal 50 plus. The working tax credit now includes additional elements for eligible people aged 50 or over who move into work for 16 hours a week or more.
From 2005, we will be looking at changes to the tax rules to allow people to continue working for the sponsoring employer while drawing their occupational pension and consulting on best practice to ensure that occupational pension rules do not discourage flexible working.
The Government's Green Paper also recognised that the state pension has a role to play in encouraging flexible retirement. We therefore published proposals to improve the reward for deferring state pension from 2006 by increasing the rate at which weekly increments can be earned, and offering an alternative to increments in the form of a taxable lump sum payment. We will be announcing our plans on this proposal in due course.
In October 2006, we will implement anti-age discrimination legislation covering employment and vocational training. This will include making compulsory retirement ages unlawful except in those cases where employers can show they are objectively justified.
694WAnd from 2010, as state pension ages start to equalise, as well as looking at policies to treat men and women aged between 60 and women's new state pension age as active labour market participants, we also propose to raise the earliest age that a pension may be taken from age 50 to age 55, to further promote the benefits of extending working life for both employee and employer.
Alongside the implementation of these policies, we will continue to work to change employers' attitudes through our Age Positive campaign, and through the development of good practice guidance materials with employer organisations and other external partners. This work will help ensure opportunity for all and remove discriminatory practices, which encourage involuntary withdrawal from the labour market and early retirement.
The Government are currently consulting on options for outlawing age discrimination in employment and vocational training under the European Employment Directive. The Age Matters consultation document launched on 2 July includes proposals for tackling employers' mandatory retirement ages—that is, the ages employers set for the compulsory retirement of their employees. Under the directive, compulsory retirement ages will be unlawful unless they can be objectively justified. The Government will decide how to tackle this once it has analysed and considered the responses to the consultation. Age Matters also explains that we shall take advantage of the directive's provisions that allow occupational pension schemes to set ages for admission or entitlement to retirement benefits. Such normal pension ages are necessary for the operation of defined benefit schemes.