Pensions

March 31, 2015 7:21 PM

The Liberal Democrats believe the way that older people are treated is the mark of a fair society. That's why we have protected today's pensioners with the best ever system of uprating the state pension - by whichever is the higher of wages, prices or 2.5%.

Tomorrow's pensioners will benefit from our new, simple, single state pension, which will value those who have spent years caring for children as much as those who have been employed. We have given people more freedom over their pensions by scrapping rules which forced people to buy poor value annuities, and scrapped the "default retirement age" so that people can choose when they want to retire. Over five million people have now been automatically enrolled into a workplace pension thanks to the Liberal Democrats. And we are clamping down on unfair charges on these pensions.

Our manifesto commits us to completing our radical reforms and writing the triple lock into law so that pensioners are no longer faced with desultory increases such as the 75p increase once offered under Labour.

Record of delivery Promise of more
Introduced a 'triple lock guarantee' to increase the state pension by the higher of earnings growth, price inflation or 2.5%. Change the law to make the triple lock permanent; guaranteeing decent pension rises each year.
Given people freedom to use their pension pots how they choose. Crack down on unfair charges that stop people's pension pots from growing while they save.
Helped five million people to save into a workplace pension for the first time. Complete the roll-out of workplace pensions to 9 million workers, on time and in full.
A new simple, single state pension to help people save for a better retirement. Improve workplace pensions to bring more people in, and encourage higher savings.

Key Policies

1. Protecting the Triple Lock. Liberal Democrats will write the 'triple lock' into law so that the state pension is uprated by whichever is the highest of wages, prices, or 2.5%.

2. Workplace pensions for all. We will clamp down on unfair pension charges, help more people to save into a workplace pension and help people to save enough from their retirement by prompting them to put more in as they start to earn more. We will also give them more freedom with their pension once they retire.

3. A fair, simple state pension. We will complete the introduction of our new Single Tier Pension which will mean pensioners feel the benefit of every penny they save in their working life, instead of losing out through means testing. The full new state pension will be at least £151.25 a week.

We have focused on offering a good deal on the basic state pension, not least because this is of particular importance to many women and the low-paid, but also because pensioners have lost out from low interest rates whilst borrowers, such as those paying mortgages, have gained. We have other polices which have helped younger people such as the rise in the income tax threshold. In any case, the new single state pension will cost about the same in the short-term and will actually cost around half a per cent of GDP less by the middle of this decade.

KILLER FACTS

1. The triple lock guarantee would ensure an increase in the value of the state pension of at least £790 per year by the end of the next Parliament.[i]
2. Overall, it is estimated that the triple lock will offer pensioners £12,000 more over the course of their retirement.[ii]
3. In 2000 Labour only increased the basic state pension by 75p. At the time, Help the Aged said described the 75p increase as "just unacceptable".[iii]
4. The triple lock delivered the largest ever cash increase in the Basic State Pension of £5.30 a week in April 2012, and made sure that pensions rose above inflation in April 2013.[iv]

BASIC FACTS

1. The state pension is £113.10 per week until April 2015.[v]
2. Women's state pension age will be equalising with men's (65) in 2018, rising for both to 66 by October 2020; 67 between 2026 and 2028.
3. For the first time in history, there are 11 million people aged 65 or over in the UK.[vi]


[i] Steve Webb 2014

[ii] Parliamentary debate 2014

[iii] Mervyn Kohler, Help the Aged, 1999

[iv] Benefit rates 2012 Gov.uk

[v] The basic state pension Gov.uk will be uprated after 6 April 2015

[vi] Mid-2013 Population Estimates UK Office for National Statistics, 2014