Oral Answers to Questions

Owen Smith Excerpts

Monday 10th January 2011 Commons Chamber

[Steve Webb]

My hon. Friend raises the very important point that falling interest rates and rates of return on savings tend to affect older people in particular. When we look at state pension reform, the return to saving and the reward for saving will be a particular priority for us. Many pensioners have their savings in very low-interest accounts, sometimes paying as little as 0.1%. There are much better rates out there, and I encourage all pensioners to shop around extensively to find the best rates possible.

[Owen Smith (Pontypridd) (Lab)]

13. What estimate he has made of the number of people in receipt of pension credit who will receive reduced payments as a result of the change to the timetable for the equalisation of the state pension age.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Just to be clear, no one currently receiving pension credit will have reduced payments at all because of the revised state pension age timetable. In future, however, we anticipate that about 120,000 households could be affected by the increase in the pension credit qualifying age as a result of the change to the equalisation timetable between 2016 and 2020.

[Owen Smith]

Given that we know that the poorest pensioners are some of those who will be hardest hit by the Government’s changes in respect of equalisation, will the Minister consider de-linking entirely the increase in the qualifying age for pension credit, which is paid only to the poorest, and the increase in the threshold for women’s pensions? He says that he is worried that the relationship with his Tory masters is a bit cosy; here is an opportunity for him to strike a rare, Liberal, fair blow.

[Steve Webb]

The hon. Gentleman is right that, on average, people of lower social classes and on lower incomes tend to have a shorter life expectancy. The good news is that life expectancy is rising for people on all income levels, so as we raise the state pension age, it is only right and proper that we raise the starting point for pension credit. It would be very strange to go on paying at 60 something called pension credit when the state pension age rises, as under the previous Government’s plans, to 66, 67 and 68.