State Pension Reform

William Bain Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

Yes, I can give my hon. Friend the assurance that he seeks. If a pension document says, “You have already built up a pension of £160, £170 or whatever”, people will get at least that amount. Going forward, people will not be able to build up those sorts of pensions in the future, but when they have built them up already, we will recognise those contributions.

[Mr William Bain (Glasgow North East) (Lab)]

The 1.4% rise in employee national insurance contributions and the 3.4% rise in employer contributions appear to involve an initial windfall of about £6 billion a year for the Treasury. What guarantees will there be in the Bill that current members of public and private sector pension schemes do not lose out in real terms as a result of these changes?

[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.