State Pension Reform

Stephen Mosley Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

I would certainly warmly welcome all-party support. I have tried to approach the issue in as constructive a way as I can, because we want an element of stability in the pension system. I am not convinced that levying national insurance contribution on working pensioners is the way forward. Clearly, what we want is some flexibility in retirement. We want to get away from this cliff edge where people are either working or retired. We are interested in a model of phased retirement, partial drawing of pensions, deferring retirement and part-time work. As soon as we say, “You are either working or retired; you pay national insurance or you do not”, we get back to the cliff-edge model that we are trying to move away from.

[Stephen Mosley (City of Chester) (Con)]

I welcome this statement, which will reduce the complexity of the pensions system, reduce means-testing and reduce the uncertainty for future pensioners. Will the Minister say whether it will also reduce administration costs within the Department for Work and Pensions?

[Steve Webb]

It will indeed. To give a flavour of the scale, at the moment nearly half of all pensioners are entitled to some sort of means-tested benefit. That is an extraordinary and absurd situation. If I tell the hon. Gentleman that by the time the system is fully implemented, we will be down to one in 20 pensioners being entitled to pension credit, that provides an example of the scale of the change we are bringing in.