State Pension Reform

Debate between Paul Uppal and Steve Webb

Monday 14th January 2013 Commons Chamber

[Steve Webb]

At the moment, we have a two-tier work force: those who are paying full national insurance and drawing a basic pension and a SERPS pension; and those who pay a reduced national insurance, who just build up a basic pension. In the future it will be simpler: there will just be workers who pay national insurance and build up rights under the single tier. We have to honour the past and deal with its complexity, but going forward every year will be a year’s worth of single-tier pension—a thirty-fifth of £144 for everybody. Whether they were previously contracted in or contracted out, it will be the same for everybody.

[Paul Uppal (Wolverhampton South West) (Con)]

I welcome the statement. Out there in the real world my constituents are heartened by us in this place seeking to simplify an aspect of financial payment for once. In relation to young entrepreneurs and many of those who are self-employed, can the Minister assure me and the House that those who pay into the national insurance pot will, under the single-tier system, see full payment and full benefit from the contributions they make?

[Steve Webb]

I am grateful to my hon. Friend for mentioning the self-employed. At the moment, the self-employed build up rights under the basic pension—the £107—but not the equivalent of the £144. In our world, there are just people who pay national insurance, build up qualifying years and build up a pension. The self-employed are therefore potentially substantial beneficiaries of the new and simpler system.

Oral Answers to Questions

Debate between Paul Uppal and Steve Webb

Monday 10th December 2012 Commons Chamber

[Paul Uppal (Wolverhampton South West) (Con)]

3. What steps he is taking to increase take-up of workplace pensions.

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

Automatic enrolment was introduced in October and the number of workers saving into a pension in some of Britain’s largest companies has already increased. In steady state, we expect 6 million to 9 million people to be newly saving, or saving more. To support this, we are running a national communications campaign, including TV adverts targeting those least likely to be saving in a pension.

[Paul Uppal]

It is becoming increasingly apparent that we on the Government Benches are on the side of those who strive and work hard in society. In that vein, how can my constituents in Wolverhampton South West who are saving for the future have access to enrolment to high-quality pension funds?

[Steve Webb]

Through the creation of the National Employment Savings Trust we have ensured that there is a benchmark of low-cost, high-quality pension provision, which is driving down costs across the market. We need to go further and we are looking at whether the role of NEST can be expanded. We are also driving through transparency on charges, so that firms and employees can see what they are paying for and can pay less over time.

State Pension Reform

Debate between Paul Uppal and Steve Webb

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I thank the right hon. Gentleman for his welcome for the proposed system. It will be financed on a cost-neutral basis within the system: we will spend less money on means-testing and, for instance, savings credit, we will withdraw some of the very small payments that we currently make to people who do not even live in this country, and we will remove some of the highest accruals for the highest earners. We therefore do not need to involve tax relief. As the right hon. Gentleman will know, the Government have refined the previous Government’s plans, so tax relief will be less concentrated on the highest earners, but we have no further plans to change tax relief.

[Paul Uppal (Wolverhampton South West) (Con)]

It is always an honour to follow the right hon. Member for Birkenhead (Mr Field), who invariably speaks a great deal of common sense on these issues.

I thank the Minister for publishing the Green Paper, which, along with the introduction of universal credit, constitutes a seminal reform. We in the Government parties are sending the message that it always pays to work and it always pays to save. We are taking radical steps in regard to the choices that we give pensioners on annuities; may I ask the Minister to continue that work? After all, we are talking about the individual savings of pensioners who have worked all their lives.

[Steve Webb]

My hon. Friend is absolutely right. There is a clear link between the major reforms that the Department is introducing for people of working age and those that it is introducing for those who will reach pension age in the future. “It pays to work” and “it pays to save” must be the right combination.

My hon. Friend asked about pensioners’ savings. In a world in which we will enrol people in workplace savings, we need them to be confident that they will be better off when they save, and that is one of the specific purposes of the reforms. If my hon. Friend wishes to raise any further points, I will certainly respond to them.

Oral Answers to Questions

Debate between Paul Uppal and Steve Webb

Monday 28th March 2011 Commons Chamber

[Steve Webb]

Well, the right hon. Gentleman must not have been paying attention last year when the Chancellor announced in his comprehensive spending review that the winter fuel payment would be exactly as budgeted for by the previous Labour Government. Perhaps he was not listening.

[Paul Uppal (Wolverhampton South West) (Con)]

13. What assessment he has made of the potential effects on pensioners of the uprating of pensions using the consumer prices index.

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

The net effect of the triple guarantee for the basic state pension—the figure we gave a moment ago—and CPI for the additional pension is estimated to be a lifetime gain of around £10,000 for the average person reaching retirement in 2011. The impact on private sector occupational pension schemes will vary from scheme to scheme.

[Paul Uppal]

Can my hon. Friend confirm that the triple guarantee will ensure that pensioners will receive a decent offering from the state in their retirement?

[Steve Webb]

My hon. Friend correctly points out that for the past 30 years the value of the state pension has been falling and falling relative to the living standards of the working population. We are proud to have put a halt to that.

Oral Answers to Questions

Debate between Paul Uppal and Steve Webb

Monday 22nd November 2010 Commons Chamber

[Paul Uppal (Wolverhampton South West) (Con)]

1. What recent assessment he has made of the effect of trends in longevity on his Department’s expenditure on pensions.

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

Between 2004 and 2008, our estimates of life expectancy at pension age rose by more than a year. For those who reach pension age this year alone, that will add £6.5 billion to their expected pensions over their lifetimes.

[Paul Uppal]

Does not increasing longevity make even more urgent the Department’s plans to get more people saving for their old age?

[Steve Webb]

My hon. Friend is absolutely right. We have taken forward plans introduced by the previous Government for automatic enrolment into workplace pensions, so that as people are working for longer, they can still retire on decent pensions, through more workplace saving.