Clause 3 - Savings credit
State Pension Credit Bill [Lords]
10:30 am
Professor Steve Webb (Northavon, Liberal Democrat)
I apologise. The Minister is quite right.
That would have been the strange effect of tabling only amendment No. 1. Amendment No. 2 is designed to address that and would assume that such men were drawing the pension that they had accrued so far.
The Minister might say, ''It is a funny business to assume that people are getting a pension when they are not.'' However, on Tuesday she said that the system would do that for 65-year-old men who defer. If a 65-year-old man defers his pension until he is 66 and claims pension credit at 65, the Government will, properly, say, ''We'll assume that you're getting a pension and treat you as though you were getting a pension, even though you're not, because we do not want to give you a barmy advantage for deferring and treat you as though you have no income.'' The principle of assuming that a person gets a pension that he does not receive is implicit in the system.
I accept that it is a bit muddy to assume that a person is receiving the pension that they have accrued so far. The phrase ''decrepit computer systems'' may pop up in the next half hour. The phrase is beloved of the Secretary of State because he is fond of saying that computers cannot count—no, not ''count'', although one wonders about that sometimes. I meant to say cannot cope.
Many men aged 60 to 64 would have accrued something approaching a full basic state pension. Amendment No. 2 would not assume that they have a full basic state pension because that would entitle them to savings credit to which they might not be entitled if, when they reached 65, they did not have a full basic state pension. Our drafting of the amendment erred on the side of caution, as we are wont to do. For example, we are arguing not that someone who has just swanned into the country should be imputed to be earning a full basic pension and should receive a savings credit for each penny that he had saved, but that people who have worked all their life and have practically accrued a full basic pension should receive a reward for their savings at the age of 60, not 65. I accept that, over
time, the 60 years threshold will rise and eventually equalise at 65.
We want equalisation at 60 not 65 because of women aged 60 to 64. That is the critical reason behind the amendments. Women pensioners will have listened carefully to the Secretary of State for Work and Pensions announcing the virtues of the pension credit and the savings credit and saying that they are a reward for pensioners who save and that, at last, they will not be worse off than their neighbour. Women aged 60 to 64 will have said, ''Good. That's me.'' The Government made the case that the pension credit would be good news for people who save and that it would get rid of the next-door neighbour problem.
It will not. Many woman aged 60 to 64 may think of themselves as pensioners. That is not a strange notion. Let us bear in mind a woman of 62 years who heard the Secretary of State talking about pensioners being rewarded for saving. Perhaps long speeches qualify certain proposals, but headlines do not, and nor does the coverage given to such speeches. The Government have raised an expectation among women aged 60 to 64, and to turn round and tell them, when the system is in place, that they may have to wait five years to be rewarded for saving and until then will be no better off than their next-door neighbour may create resentment. If the amendment were to bring 60 to 64-year-old men into the scope of the proposal, it is worth considering.
Can the Minister give us an estimate of the savings credit entitlement of women aged 60 to 64 if the threshold was lowered? That could be used as part of the total cost but, if the proposal really is a reward for saving, pensioners should be given that reward.