Clause 3 - Savings credit
State Pension Credit Bill [Lords]
11:15 am
Mr James Purnell (Stalybridge and Hyde, Labour)
I refer to a particular aspect of amendment No. 5. I have sympathy with his motives although, in rectifying an anomaly, we may create new anomalies. As my hon. Friend the Member for Colne Valley (Kali Mountford) said, such a proposal may not improve matters. I hate to disappoint the hon. Gentleman; although I agree with what he forecasted Labour Members would say. The best way in which to cope with the anomaly would be to give people a top up through the guarantee credit element.
I seek assurance from the Minister about the treatment of foster carers. They provide a vital service and deal with some of the most difficult cases that life can throw at people. A constituent of mine has given up her job to take on two teenage boys who have been subjected to fairly significant abuse in two different homes. That is an incredible step to take on behalf of society and, bearing in mind the expenses that carers receive, it is poorly rewarded. The service is not salaried.
My constituent was warned that, under the current system, she would lose contributions to her basic state pension. Home responsibilities protection is calculated through passporting from other benefits. If she gave up work to look after her own children, she would receive home responsibilities protection through the receipt of child benefit but, because she does not receive child benefit for fostering children, she does not receive home responsibilities protection.
The sensible reaction of people who realised that they were not receiving credits towards their basic state pension—very few people do realise that—might be to save towards a private pension. The problem with the savings credit as it is constructed is that such people may be subjected to a 100 per cent. withdrawal rate on the small income from their private pension. If they were earning less than £77 overall in retirement, the income will be taken away at the rate of 100 per cent. Will the Government consider rectifying the overall situation with regard to foster carers or allow those who have saved towards a private pension to keep a proportion of that pension in retirement?
We must continue to attract people into foster caring. I have sat on adoption panels that have had to make terrifying choices about where to place children—such as in foster homes that we were not confident would give them the best possible care or to leave them in care homes. We all know that children in care often have a bleak prospect of educational development and fall back into criminality and drugs. The more that we can attract foster carers into offering their services, the better. If the Government can reassure us that they will consider proposals in respect of the pensions of foster carers, the more progress would be made towards attracting people into the foster care service.
It being twenty-five minutes past Eleven o'clock, THE CHAIRMAN adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at half-past Two o'clock.