Campaigns & issues

Our summary of the Government's White Paper 'Security in retirement - towards a new pensions system'.

The Government’s package of proposals includes:

• State pensions will be reformed so that they are simpler and more generous and will ensure that pensioners share in rising national prosperity. The BSP will be re-linked to average earnings by 2012.
• Pension Credit will continue to increase in line with earnings.
• From 2010‚ the number of contributory years required for the Basic State Pension (BSP) will be reduced to 30 and Home Responsibilities Protection will be replaced with a new weekly credit for those caring for children aged under 12.
• A new contributory credit will also be introduced in both the BSP and the second state pension (S2P) and for those caring for severely disabled people for 20 hours or more per week. Initial contributions conditions to the BSP will be abolished so that every year of credits and contributions will count towards entitlement to the BSP. These measures mean that‚ by 2025‚ over 90% of women and men will be entitled to the full BSP on retirement.
• There will be a new low cost ‘personal accounts scheme’ (National Pensions and Savings Scheme). Employees earning over £5000 will be auto-enrolled with the right to opt out. Employees will contribute 4%‚ employers will contribute 3% and a further 1% will be contributed in the form of tax relief. Non-employees‚ including the self-employed and non-workers‚ will be able to opt into the scheme and receive tax relief on their savings.
• The Government will extend working lives by raising the state pension age (SPA) in line with gains in average life expectancy. SPA will be equalised for women and men at 65 between 2010 and 2020. SPA will then rise to 66 over two years between 2024 and 2026‚ from 66 to 67 between 2034 and 2036 and then to 68 in 2044 to 2046.