Alok Sharma's Westminster Diary, October 20, 2011
Alok Sharma MP • Published 20 Oct 2011 09:30
7 Comments
The Pensions Bill is making its passage through Parliament this week. I served on the committee for this piece of legislation and it is therefore of particular interest. Indeed the subject of pensions becomes of increasing interest as we get older!
Two of the key elements of this Bill are amending the timetable for increasing the State Pension Age to reach 66 in 2020 and amending the auto-enrolment provisions for workplace pension schemes.
Under the 2007 Pensions Act, the increase to 66 was due to take effect between 2024 and 2026. However, the 2007 Act was based on life expectancy projections in 2004, which by 2008 had increased by 18 months. Quite simply we are all living longer on average, which is good news, but it also puts a strain on the pension system and taxpayers.
It is interesting to note that had the state pension age risen in line with life expectancy since the first contributory pension was introduced in the 1920s, the age of retirement would now be over 75.
One of the most hotly debated issues in this Bill was bringing forward the timetable for equalising women's retirement age with men's to 65 and then 66, because an estimated 33,000 women would have to wait two years longer to receive their pensions. The Government always promised to look at transitional arrangements to help those in this group, and so I am very pleased it has now proposed to delay by six months the second rise in pension age to 66, for both men and women. This means the increase in state pension age for some women will be capped at 18 months. The cost of this amendment is one billion pounds and Age UK has welcomed the changes.
Labour wanted to go further, but their proposals would cost taxpayers an extra £10bn. They have neither been able to explain how they would fund this, nor guarantee they will reverse the changes should they form a government again. So much for a principled argument!
Under auto-enrolment proposals any employee earning over the personal allowance threshold will automatically be enrolled in a private pension scheme contributed to by the employer, the employee and with an element from government through tax relief.
Yes, there will be a cost to employers, but ultimately encouraging saving is a good thing and both the Coalition and the Opposition agree on the principle of auto-enrolment.
Have your say. Post a comment on this article.
-
Barbara Bates
Unregistered User
Oct 21, 16:49
Report commentSorry Mr Sharma but the government amendment was nowhere near enough to help women like me who have worked from the age of 15 and now are stuck with working to 65½ or 66. We are taxpayers too, and have been for many, many years and actually we're not "costing" anything as what you are taking from us is in the future, you're not giving us anything to "cost" you. Labour's amendment may not have raked the money in as early as the coalition's intention is to but it would have been a whole lot fairer and would have led to far less ill feeling. I think if this bill is passed as now looks certain then come the next election the women affected by this, their families, friends and the young people who are denied jobs by them being blocked by people who should have been pensioned off will make their displeasure felt by where they place the X's on their ballot papers. We are not satisfied with the crumbs we have been thrown whatever Age UK said, they may welcome it but the women in the real world who are being hit hard by it do not.
Recommend?
Yes 12
No 1
-
Joy Waters
Unregistered User
Oct 21, 18:38
Report commentSpot on Barbara. The government may kid themselves that we are all happy but I can assure you we are not. I will now be retiring at the age of 65 years and 8 months. My contemporaries only four years older have retired at 60. A fair rate of increase, I don't think so.
Recommend? Yes 10
No 1
-
Janet
Unregistered User
Oct 21, 20:41
Report commentMr Sharma, I am one of your constituents and I am one of the women affected by the acceleration in pension age. I came to see you at the beginning of the year, and have written to you several times attaching vast swathes of articles and independent reports that state quite clearly and unequivocally that what your government is doing is unfair, is against the coalition agreement and does not help getting the deficit down in this parliament. I’m therefore quite disappointed at the tone of your article in which you have congratulated yourself at voting through the Bill. You are quite right that Age UK did welcome the amendment but they also said it did not go far enough (and your government didn’t release the information about it until the 11th hour when there was no time to do anything about it). Many other commentators have said it is a far too small concession. We agree with you that an increase in the pension age makes sense, indeed no-one complained when Labour changed our State pension age from 60 to 64. However, we are the only group of people that have had their State pension age raised twice – at a stroke it will force us to wait up to 18 months longer than that already increased and forgo approximately £12,000 each, not counting National Insurance contributions. We women affected have had our pension expectations dashed and have been given scant time to plan. It is the job of politicians like you to manage each generation’s expectations and deliver on your promises. You have quite clearly not.
I am very pleased that auto-enrolment is now been set up – unfortunately no such provision was made in our day. Saving for one’s pension should be done over a working lifetime, and we now have to scrimp and scrape in the next few years to try to save enough for a decent old age.
Recommend? Yes 10
No 1
-
Jenny
Unregistered User
Oct 21, 21:28
Report commentYou have absolutely no idea what it is like to live in the real world. Your pension bill does not give us sufficient notice and robs us of 18 months more pension in addition to the four years already added on to our pension age. We have worked since the age of 15 and paid taxes and NI. You have left half a million women very, very angry. Do you seriously imagine you will still be an MP in the near future? You have not addressed any of our concerns whatsoever. The sooner this coalition government is voted out the better.
Recommend? Yes 11
No 1
-
nicola
Unregistered User
Oct 22, 09:55
Report commentI agree with all of the above. Get real - half a million women are NOT AT ALL HAPPY!!.
I thought people like you were elected to ensure fairness - this has most definitely NOT been a fair rate of increase despite what you may like to think - 6 months quite simply is a pittance and does not address the problem. Shame on this coalition government - both parties have lost my vote.
Recommend? Yes 7
No 1
-
Ruth
Unregistered User
Oct 22, 16:22
Report commentA few crumbs thrown may make all of you MPs who voted the bill through feel good and happy but it certainly doesn't make the women discriminated against happy ! They will still have to traipse to work until they are 65 and 1/2, with age related complaints, paying in contributions towards keeping young fit people on unemployment benefits. 6 months concession still doesn't give them time to replan or to save.Some like my very own sister are widows whose husbands paid in contributions for years too and had nothing back. These women have been targeted twice and very unfairly this second time at such short notice !
Money can be found by the government to keep rich bankers happy and to send abroad, yet hard working women in this country are being robbed of 18 months of their rightful state pension and their freedom too.
500,000 women, their familes and friends will remember at the next election which MPs betrayed them !!!!
Recommend? Yes 8
No 1
-
Val Bond
Unregistered User
Oct 23, 14:37
Report commentMr Sharma, as a former accountant, please tell me how the following can be mathematically logical -
A 6-year difference in pension age for women born only 4 years apart, and a 3-year difference for women born only 1 year apart!
And as you repeatedly bring up the old chestnut of affordibility, how is it that we can afford to increase aid overseas and find money for the most senseless of things, when our very own pensioners are struggling to cope with their heating bills and, quite honestly, everyone else apart from the rich are trying to make ends meet?
What world are you living in?
Recommend? Yes 5
No 2
Return to the main index, get more from this section or browse our Opinion archives.
