State Pension Reform

Rehman Chishti Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

We have already given a guarantee that, having renegotiated the public sector pension schemes, we will make no further changes in rights under those schemes for 25 years. While we are changing the national insurance state pensions of public sector workers, we are not touching the public sector pension. Private sector workers may—indeed, probably will—find that their employer adjusts the private sector scheme in response, but, as I have said, even with that adjustment—even with the higher national insurance payment—the vast bulk of workers, certainly those within 20 to 25 years of pension age, will still be net beneficiaries.

[Rehman Chishti (Gillingham and Rainham) (Con)]

How will the new system affect those on low earnings?

[Steve Webb]

In the past, the state provided a flat basic pension and then an earnings-related second pension. By definition, low earners received low earnings-related pensions. What we propose is simply a flat pension, which means that low earners will, on average, tend to benefit.