Pensions

Baroness O'Cathain Excerpts

Thursday 5th May 2011 Lords Chamber

[Lord Taylor of Holbeach]

The noble Baroness is exactly right. Of course, that is what lies behind the Government’s proposals.

[Baroness O'Cathain]

My Lords, will my noble friend take very seriously indeed the problem that will arise with pensioners who currently have a state pension but will not be raised up to the £155 level when the new pension comes into effect? These are the very people who have been so badly treated by the earnings link being cut and who have a lower pension than those in many other European Union countries.

[Lord Taylor of Holbeach]

My noble friend makes a very good point. We would expect people who traditionally do not build up significant amounts of additional pension, such as women and low earners, to gain under a single-tier pension. Conversely, those who expect to build up much more significant amounts of additional pension, such as higher earners and those with longer working lives, will no longer be able to do so under a single tier. So there will be a redistribution within the pensions system which the single tier will be able to operate.