What have the Lib Dems in government done for the elderly?
Throughout our time in government Liberal Democrats have been committed to supporting our elderly population. Lib Dem policies that have been delivered since 2010 provide stability for pensioners, as well as those coming up to retirement .They will be able to better plan their futures knowing that they will no longer be faced with the insecurity of unpredictable state pension rises.
Thanks to our flagship “triple lock” guarantee policy, the basic state pension has risen in each year of this parliament. The rise has been by the higher factor out of price inflation, wage inflation or 2.5%. This has meant that the state pension will be £440 higher per year in 2014-15 than if it had increased in line with earnings from the start of this Parliament, with the actual cash increase worth £800 a year more in total.
The triple lock was one of our key demands in Coalition negotiations. I am delighted that my fellow Greater Bristol MP and Lib Dem Pensions Minister Steve Webb has ensured that the Government is giving today’s pensioners a fair deal.
The Coalition has also given people greater choice about how to access their workplace pension savings that have been paid into defined contribution pension pots. From April 2015, individuals aged 55 or over will be able to withdraw these savings as they wish, subject to their marginal rate of income tax and their scheme rules. Instead of being forced to buy an annuity, they will be able to invest their savings in another financial product, property, or even in short term assets and spending, if that is the judgement they make about their savings. We have given pensioners more control over how they use their own money accumulated while in work. This is a classic liberal measure, trusting people to make the right decisions.
Finally, a new Single-tier State Pension will combine the Basic State Pension and the State Second Pension. This pension will be set above the basic level of means-tested support (£145.40 per week for a single pensioner in 2013/14). The new Single-tier pension will also support the introduction of auto-enrolment into workplace pensions which we introduced in October 2012. Auto-enrolment helps people save for their retirement by matching contributions (4% employee contribution, matched by 3% from the employer and 1% from government).
The Single-tier pension is an important development, as when we entered government 11 million people were simply not saving enough for their private pensions. The existing system relied heavily on means-testing, which discouraged saving because people who saved could end up with just a few pounds a week more than someone who saved nothing. Our reforms will reduce means-testing and promote private pension saving.
Alongside these changes, we are taking measures to ensure that by April 2015 everyone approaching retirement receives free and impartial face-to-face guidance on their available choices. Pensions are not always straight forward and we want to ensure that people are making informed decisions about their future.
Looking forwards, Liberal Democrats announced earlier this year that pensioners would be guaranteed to earn at least an extra £790 per year by the end of the next parliament under our manifesto plans. These changes mean the state pension will be worth at least £131-a-week by 2020, up from just £97.65 four years ago. In total, pensioners who receive the full state pension would get at least £6,800 in 2020: the plans are expected to benefit 55, 872 pensioners in Bristol alone.
While in government the Liberal Democrats have boosted pensioner incomes – a stark contrast to the increases linked to prices that led Gordon Brown to award a 75 pence increase in Labour’s first term! We’ve also protected the winter fuel payments, free TV licences and the bus pass. I am particularly proud of the free bus pass, I’ve seen what a big difference it makes to my own mother, enabling her to go out every day. The bus pass is good for the environment and also for the mental and physical well being of older people.
I have always believed that how a society treats its elderly people is a measure of its decency. I and my Lib Dem colleagues in government, have undoubtedly held true to this principle and put policy into practice for the benefit of millions of elderly people.