Pensions Update

Debate between Thérèse Coffey and John Redwood

Tuesday 7th September 2021 Commons Chamber

[Dr Coffey]

In response to the first part of the right hon. Gentleman’s question, the legislation is there regarding the earnings link and we are maintaining that. We will be doing further analysis to understand what proportion of median earnings the pension will be, but I have no plans to change aspects of it. We think it is a sensible approach that we have taken to redress the balance, which had moved away.

Forgive me, but I have forgotten the second part of the right hon. Gentleman’s question. [Hon. Members: “Pension credit.”] Okay. The thing about pension credit is that it is split in two: the income guarantee and the savings credit. As I said to the House, our estimate is that 75% of people we think could be eligible take up the income side of pension credit, but the savings side has a much lower take-up. That is because sometimes when people do the calculation, it may be just 1p or 2p a week and they may not think it worth while to do the whole application. However, even with the savings credit side of pension credit come things like the free TV licence and access to other benefits, so we encourage people to take it up. With the income side, we estimate that three in four eligible pensioners are taking it up.

[John Redwood (Wokingham) (Con)]

Will the Secretary of State promise to publish, at the point when she makes her final determination of the proposed increase, a three-year smoothed average or some other suitable computation so that we can see that the spirit of the promise has been kept, even if the letter could not be because of the strange gyrations of the earnings figure? I think that people would be reassured if they felt that over the longer period we had met that requirement.

[Dr Coffey]

I cannot give that commitment to my right hon. Friend today, because I do not know exactly what it involves, so I will take his request away and consider it. I want to emphasise that overall we have seen a variety of increases over the past decade owing to the triple lock policy. I am confident, as I have flagged already, that we have seen a substantial increase in pensioner income as a result of that policy thus far.