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Dept of Social Security

Answer

Mr. Nicholas Winterton: To ask the Secretary of State for Social Security what impact the minimum income guarantee will have on incentives to save for low earners. [120961] Mr. Bayley: One of the Government's main objectives is to encourage people to save more for their retirement where they can afford to do so, while at the same time providing extra State support for those who cannot save. We are introducing new stakeholder pensions and reforming SERPS through the State Second Pension. These reforms will mean that, in future, people with a lifetime of working behind them will get a large enough pension to take them above the MIG, even if they have been on low earnings throughout their life. However, it takes time to build up pension entitlements, so for many, particularly those who have already retired or who are close to retirement age, these reforms come too late. That is why we introduced the MIG to make sure that the poorest pensioners are guaranteed a basic decent income in retirement, even before stakeholder pensions and the Second State Pension mature. We recently announced an increase in the MIG capital limits to make sure that people with relatively modest savings do not lose out. We want to do more to encourage savers. In the last Budget, the Chancellor announced that we propose to consult on a new Pensioner Credit which will do just that. Our pensions reforms should be looked at as a package. We believe the package strikes the right balance between encouraging savers, while protecting those who cannot save.

Secondary information

Type

Written question

Reference

120961; 350 c33W

Session

1999-00

Question not reached

Yes

Subjects

Income support Income Pensioners Personal savings Low incomes Pensions Means-tested benefits

Link

View this Written question on www.publications.parliament.uk