Member News
Alistair Darling has confirmed that there will be a number of new measures to help pensioners.
The chancellor has pledged to help pensioner households who have modest savings by raising the limit of capital disregard on Pension Credit from £6,000 to £10,000.
Following an increase earlier this month of the basic state pension by £4.55 a week, Darling has added his commitment to further increase this by at least 2.5 per cent.
The Winter Fuel Allowance introduced last year will be maintained at the higher level for another year, equating to £250 for over-60s and £400 for over-80s.
Darling also said that grandparents of working age who provide childcare for their families will have this counted towards their entitlement for the basic state pension.
Stakeholder Response: Age Concern and Help the Aged
Michelle Mitchell, charity director for Age Concern and Help the Aged said:
"In a Budget for jobs, workers over 50 have once again slipped under the government's radar. With today's figures showing unemployment among the over 50s rising at a higher rate than among any other age group, without targeted help for over 50s, ministers risk creating a lost generation of older people shut out of the job market and walking into a retirement blighted by pensioner poverty."
"Maintaining the Winter Fuel Payment, measures to help grandparents and help for low-income savers will provide cheer to pensioners in an otherwise gloomy Budget. But the failure to do more to tackle fuel poverty will continue to leave many pensioners out in the cold.
"More traineeships are welcome but the failure to provide emergency funding for our creaking social care system will exacerbate the current crisis. In an era of difficult financial choices, ministers must not use the recession as an excuse to starve the care system of funds it urgently needs or be distracted from much needed long-term reform."
Stakeholder Response: Association of British Insurers
Commenting on the government's decision to restrict tax relief on pensions contributions for people earning over £150,000 a year, Maggie Craig, the ABI's director of life and savings, said:
"This is a disappointing day for pension saving. Although this move will not directly affect the vast majority of people saving for retirement, we are concerned that it sends a worrying message to pension savers that the government is now breaking its contract on tax relief. Tax relief is there for a reason – it compensates responsible people who agree to defer some income by locking pension savings away until they retire. That principle was enshrined by Lord Turner in his government-backed report on pensions in 2006.
"To maintain consumer confidence in the pensions system, the government must give a categorical assurance that the historic principle of pension savers receiving tax relief on their contributions will not be undermined any further.
"This move is likely to be expensive to implement and will reintroduce complexity and change to the pension system, just three years after the government's 'A-Day' reforms. It is vital there is detailed and effective consultation on the implementation of these changes.
"Far too few people are saving for their retirement, and Britain faces a 2050 demographic time bomb when there will be twice as many pensioners for the working population to support – the government's decision will do nothing to encourage people to save."
Dods Parliamentary Communications Ltd