Deferred pensions lump sum
The Government has confirmed that people who defer taking their state pension for five years would receive a lump sum.
The Work and Pensions Secretary, Andrew Smith confirmed the proposal that was touted in the Pensions Green Paper in December 2002.
He announced that people who defer taking the state pension for five years would receive a lump sum of £30,000.
Mr Smith confirmed the move during his speech to party delegates on the final day of Labour’s Party Conference in Bournemouth, yesterday.
Conservative Shadow Pensions Secretary, David Willets attacked the plans claiming that the Government has not said what effect this would have on the new pensions credit.
Mr Willets highlighted that a £30,000 lump sum could lead to people losing their pension credit because it is means tested.
Mr Willets commented: ‘It is all well and good for Andrew Smith to say you can take it as a lump sum, but what about its effect on means-tested benefits. If people lose pension credit as a result they would find themselves penalised not rewarded.
‘Yet again, the spread of means testing is at the heart of the problem. The half of pensioners entitled to the pension credit would be mad to take up Andrew Smith’s scheme.’
Mr Smith condemned employers who have closed pension schemes to their employers. He accused employers of ‘walking away form their responsibilities’ and ‘short-changing workers who saved all their lives’.
Mr Smith announced that the Government would change the law to stop employers walking away from their obligations, stop companies using take-overs to scrap pensions, and, stop firms changing schemes without consultation.
The Minister also confirmed that the Government would not be putting up the state pensionable age.
Mr Smith added: ‘We are giving people more choices. But it would be wrong to force longer working on the least well off, often with the hardest working lives and the shortest retirement to look forward to. We reject putting up the State Pension Age.’
