DEPARTMENT FOR WORK
AND PENSIONS News Release (PENS-034) issued by The Government News
Network on 26 July 2007
Women and carers
received a huge boost today thanks to the reforms to the state
pension system in the Pensions Act 2007, which has received Royal Assent.
For many low income women, this could mean an extra £50 a week by
the 2050s from the state pension.
Secretary of State for Work and Pensions Peter Hain said:
"This Act will deliver the most important reforms to the
state pension system in generations.
"Many women and carers are currently denied a full pension
entitlement because their family and caring responsibilities mean
they are not in work long enough to qualify.
"This Act provides women and carers with a fair deal, making
it easier to balance their responsibilities and recognising their
contribution to society as a whole.
"Around three quarters of women retiring in 2010 will be
entitled to a full Basic State Pensions - compared with 35 per
cent now, and 50 per cent without reform. More than 90 per cent of
women and men retiring in 2025 will be entitled to a full Basic
State Pension."
The number of years' contributions required to achieve a
full Basic State Pension will be reduced to 30 for women and men
from April 6, 2010. The current requirement is 39 years for women
and 44 for men. The Act will gradually increase State Pension Age
to 68 by 2046 for men and women.
The Act lays the foundations for the new pensions settlement
being introduced by the Government. As well as providing a boost
for women and carers, the Act re-links the Basic State Pension
with earnings from 2012, or by the end of the next Parliament, and
provides for a simpler flat rate State Second Pension.
Hailing the new pensions settlement, Peter Hain said:
"This Act lays the foundation for the new pensions
settlement. By re-linking the Basic State Pension with earnings,
we will ensure that living standards for older people keep pace
with the rest of society. And by providing a fairer deal on state
pensions, we are providing a platform for greater saving by both
individuals and employers in the new savings scheme we are
introducing in the next Pensions Bill. For the first time, all
employees will have access to a workplace pension with a minimum
employer contribution, and a contribution from the Government."
He added:
"It is a tribute to the consensus we've built that
there is now widespread agreement that people will need to work
longer in the future - it would be wrong to leave it to future
generations to foot the bill for people living longer.
"Maintaining that consensus is essential if we are to build
the highest possible public confidence in the new pensions
settlement and to ensure that it lasts for the generations to come."
The announcement of Royal Assent was made this afternoon.
Notes To Editors
1. The Government's pension reforms build on the Pensions
Commission's analysis. The White Paper Security in
retirement: towards a new pension system, which first set out the
Government's proposals for state pension reform, was
published in May 2006. The Government published proposals to give
all employees access to a workplace pension in its White Paper
Personal accounts: a new way to save. For more information go to
http://www.dwp.gov.uk/pensionsreform/
2. Under the reformed system, people caring for children or
people with a severe disability will be able to build up a state
pension entitlement through weekly carer's credits. These
credits will be more flexible than Home Responsibilities
Protection (HRP), which requires people to build up a full
'qualifying year' to protect their state pension entitlement.
3. Under reform, a person reaching state pension age around 2050,
who has worked or cared for over 40 years, could build up a total
entitlement of around £145 per week (2007-08 earnings terms) from
Basic State Pension and State Second Pension. This compares with
less than £100 a week without reform.
4. The Bill will raise the State Pension age gradually to reflect
increasing longevity. The first increase from 65 to 66 will take
place between 2024 and 2026; the second increase from 66 to 67
will occur between 2034 and 2036; and the third increase from 67
to 68 will take place between 2044 and 2046.
Textphone: 0203 267 5145
Website: http://www.dwp.gov.uk