The Conservatives were due to outline their election policy on pensions. Having already made a strong pitch for the grey vote, the opposition chief Michael Howard is hoping to extend his reach to the baby boom generation coming up for retirement and to younger people beginning to worry about their finances as concern mounts over Britain's savings black hole.
On top of its council tax commitments, the party is promising to restore the link between the basic state pension and earnings, rather than prices, worth £11 per week to all pensioners, replacing the state second pension.
Stakeholder Response: Help the Aged
Mervyn Kohler, head of public affairs at Help the Aged, said: "The Conservative proposals for the state pension represent progress, if rather modest progress. The party is to be congratulated on acknowledging that the state pension must be indexed to earnings, and pensioners should share in the growing prosperity of the country.
"But the debate has moved further forward, and most commentators now recognise that the level of the state pension needs to be addressed as well. On this score, the Conservative proposal is cautious, and even with the link to earnings it falls short of being the firm foundation on which adequate pension planning can be built.
"The other proposals highlighted - the lifetime savings account, looking at reducing the tax burden on savings products, and so on - are interesting ideas on improving opportunities for people to save during their working lives.
"Adair Turner [chairman of the pensions Committee] has firmly told us all that we'll have to save more, so these ideas suggest that the Conservatives are willing to travel down that road."
Stakeholder Response: Association of Chartered Certified Accountants
A spokesman for ACCA said: "It is encouraging for the future of pensions in the UK that the issue already seems to be attaining such a high profile in the election campaign.
"We hope that all parties continue to treat the issue with the political seriousness it deserves and, whoever forms the next government, converts talk into action."
Stakeholder Response: Association of Retired and Persons Over 50 (ARPO50)
John Ball, economist at ARPO50, said: "ARPO50 warmly welcomes the Conservative intention to increase state pensions in line with earnings and thus reduce reliance on means testing.
"This policy, together with plans to lesson the impact of council tax and encourage saving, will ensure that all pensioners will ultimately share in the growing wealth of the nation.
"Unfortunately, even if earnings grow as much as 2.5 per cent faster than prices it will take over a decade for the basic pension to catch up with the level of the guaranteed minimum income in pension credit.
"During this period, when pension credit levels will presumably fall compared to earnings, there is likely to be a substantial increase in the number of pensioners counted as being in poverty, where poverty is measured as having an income less than 60% of the national average.
"This may not be a politically sustainable policy. It is often forgotten that the former Conservative government substantially increased the generosity of means tested benefits for the poorest older pensioners and that Gordon Brown merely picked up where the old government left off.
"It will be a great pity if the elimination of means testing can only be achieved by reducing the relative incomes of the poorest pensioners. Whilst ARPO50 welcomes the intention of reducing means testing we hope this can be achieved by increasing basic pension slightly faster than earnings, whilst pension credit merely rises in line with earnings.
"This approach would enable the gap between basic state pension and the guaranteed minimum income to be closed without the need to increase levels of poverty."
Stakeholder Response: Age Concern
Gordon Lishman, director-general of Age Concern England, said: "Finally the parties are realising that it is older voters who could have the deciding votes at the upcoming general election.
"People over the age of 55 are twice as likely to vote as those under 55, and the parties need to convince them that they will deliver for them if elected.
"The Conservatives have responded to the voices of many older people who will be pleased with these proposals and anticipating the other party manifestos with interest.
"One in five pensioners live in poverty and Age Concern believes that the only way to ensure that everyone has a decent income in retirement is to increase the basic state pension to at least £105 per week.
"If the parties want to win over the crucial older voters they need to show how they will provide a decent income in retirement, an end to ageism, and access to good public services."
