Government ‘must clarify’ pension pledges
The government has been urged by MPs to set in stone a date for when it intends to re-link increases in the basic state pension to earnings and not inflation.
Publishing its detailed report into the government’s far-reaching white paper on pension reforms announced earlier this year, the work and pensions committee has maintained its stance that “a firm commitment” on such a date should be made.
Although work and pensions secretary John Hutton said the state pension would be re-linked to earnings, no exact date was given for the changeover to take place, with 2012 or the end of the next parliament vaguely alluded to as possible dates if conditions were correct.
“We questioned the secretary of state hard on this point, as we think such equivocation is unhelpful and a firm commitment would be welcome. The additional delay beyond 2010-11 will defer the benefits of the reforms for current and future pensioners,” said today’s report.
The select committee believes that “on the whole the government’s measures are the right way forward”, as it is hopeful that the reforms will “rebuild trust in pensions”.
However, it suggests that the proposed national pension savings scheme may be too “ambitious”, amid claims that employers are forcing their workers to opt out of the scheme before it has even been introduced.
“We recommend that the government makes an early announcement on a support package to ensure a smooth introduction,” the MPs write.
Today’s report also gives a “warm welcome” for concessions made to full-time carers and to women, and claims that the decision to increase the state pension age to 68 from 2044 is a “justifiable step”.
Commenting on the MPs’ findings, Mervyn Kohler, head of public affairs at charity Help the Aged, said: “The rap over the knuckles given to government by the committee over the vagueness of the start date for the reform process is well deserved.
“Struggling pensioners cannot wait until 2012 before poverty is tackled. The net cost of the reform package is fairly marginal, so affordability is not a big issue, and this dithering over a package which is supposed to be restoring certainty is unforgivable.”
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