Clause 3 - Savings credit
State Pension Credit Bill [Lords]
10:45 am
Ms Maria Eagle (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Liverpool, Garston, Labour)
The hon. Gentleman is not a lawyer, but if he were he would know that someone will always challenge provisions if the outcome is unequal. Never mind the fact that the system is unequal in that men and women in the same circumstances do not receive the same amount of money—if there were a difference, there would be a man who, although he was benefiting, would claim that he should receive the higher amount. In all conscience as a Government, we cannot proceed on the basis that a legal challenge is possible and that we know that what we are doing is wrong but hope that no one will bring a case. That would not be a responsible way to conduct ourselves in government.
The other difficulty with the amendment is that it would cause strange outcomes for some recipients. Some men, for example, would be rewarded for their savings while aged between 60 and 64 and have the calculation based on state pension accrued before the end of their working lives. When they reached 65, however, they would find all their savings rewarded less or not at all. There are instances in which a man could receive a savings credit element between 60 and 64 and lose it when he hit 65, which would be difficult to explain.
I shall give the hon. Gentleman an example. Let us consider the case of a 64-year-old man who has a £60 personal pension but no basic state pension, because he is not yet 65, and no other income. Based on his contributions to date, he would receive a full basic state pension—that is, he would receive £77 when he was old enough. Under the amendment, he would receive £13.80 savings credit. When he turned 65, he would keep his £60 personal pension and receive his £77 a week basic state pension, so under the amendment his savings credit would be reduced from £13.80 to zero.
With the best will in the world, the hon. Gentleman is trying to find a way to include men aged 60 to 64 and to equalise and introduce savings credit at 60 rather than 65. However, the impact on the man in my example would be that he would receive savings credit to begin with, but lose it when he hit state pension retirement age or when he retired.