State Pension Reform

Hywel Williams Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

The hon. Gentleman has raised an important point about people’s ability to afford to save. One of the key aspects of automatic enrolment is the fact that an employee’s contribution will trigger an employer contribution of nearly as much, plus tax relief. If an employee contributes 4% of his salary, the employer’s contribution will raise that to 8%, so this is a very affordable form of saving. Of course we want to ensure that people who make such sacrifices in order to save will be better off as a result, and our reforms will make that outcome far more likely than it is at present.

[Hywel Williams (Arfon) (PC)]

Plaid Cymru has long campaigned for a living pension, and we welcome the Government’s single tier proposals. The current system does not ensure an adequate income for all pensioners. As Jackie Ashley wrote in today’s Guardian,

“On this issue of complexity Labour in power got it wrong, and should admit it.”

However, does the Minister accept that on the accelerated equalisation of state pension age, the Government are in some danger of getting it badly wrong for about half a million women in their late 50s? What assurances can he give about that?

[Steve Webb]

I am grateful to the hon. Gentleman for expressing support for the proposal of the single tier on behalf of the Welsh nationalists. As for the issue of state pension ages, the Green Paper involves moves beyond the pension age of 66. The issue raised by the hon. Gentleman will be dealt with in the Pensions Bill, which will be presented to this House shortly, but, beyond that, we are trying to establish a more automatic mechanism that takes account of changes in life expectancy and, perhaps, of other factors as well, such as notice periods—which is, I think, the issue that he has raised—in a more systematic way than we or other Governments have done so far.