Pensions

Alan Johnson, secretary of state for Work and Pensions, said:  "Conservative pension policy is yet again being made on the hoof.  Their pension policy was laid out some 15 months ago, but now, with Labour raising the important issue of women, they suddenly tack on some tentative piecemeal proposals as an afterthought.  

"As Michael Howard himself admitted in the recent Queen's Speech debate, he rejects arguments about long term pensions' policy as crass.  Instead he offers another press release to catch headlines, not the right policy for the long term.

"It was the Tories who left 1.9 million women pensioners in poverty living on just £69 a week. And it is the Tories' current policy that would let many of the poorest women pensioners fall back into poverty and would scrap the state second pension which is helping millions of women.

"It is Labour that has lifted 1.3 million women pensioners out of poverty and has driven thinking on a long term solution to the issue of inequality in pensions."

David Willetts, shadow work and pensions secretary, said: "The pension system as it exists today is biased against women. It was designed for the days when men earned their pensions by work and women by marriage. It is much less well suited to a modern world. We need to modernise it so that it offers a fairer deal for women. We are going to make the rules for contributory pensions family-friendly for the first time. We will offer women a better deal by properly recognising the contributions they make at work and at home.

"Tony Blair promised to end the stigma of means testing forever. That was all talk. Twice as many women as men are having to rely on means-tested benefits in retirement. Our policies will help reverse the spread of means tests."

Michelle Mitchell, head of public affairs at Age Concern England, said:  "We are pleased that the Conservative Party has recognised the pension's plight of many women in Britain today and has responded to our two-year long campaign to reform the pension system to better benefit woman.

"It is a national disgrace that one in five women pensioners live in poverty in Britain today. We want to see all the political parties commit to delivering a secure and adequate retirement income to prevent future generations of women spending their retirement in poverty."

Stakeholder Response: Association of Consulting Actuaries