Liberal Democrats back reintroduction of link between state pension and earnings

September 12, 2008 2:17 PM
Originally published by UK Liberal Democrats

The Liberal Democrat Autumn Conference today backed plans to immediately reintroduce the link between the Basic State Pension and earnings.

The Liberal Democrat Autumn Conference today backed plans to immediately reintroduce the link between the Basic State Pension and earnings.

The proposals, which come 100 years since the decision by the Liberal Government to introduce the first state pension include: The immediate reintroduction of the link between the Basic State Pension and earnings Moving towards the introduction of a Citizen's Pension, based on residency, not contributions, so that every pensioner is kept out of poverty The end of mass means-testing of pensioners, so that every working adult will receive the full benefit of any additional provision that they make for themselves

Commenting, Liberal Democrat Shadow Work and Pensions Secretary, Jenny Willott said:

"We desperately need a pension system that ensures no pensioner has to live in poverty.

"Our policy for a universal, more generous state pension would be fairer to women and carers and guarantee a decent standard of living to all pensioners.

"Labour's approach is not working. We have seen a rise in pensioner poverty and the explosion of means-testing.

"The Liberal Democrats are the only party in Britain calling for the immediate restoration of the earnings link which would benefit all pensioners now."

The full text of the motion is below.

Conference notes that: This year is the 100th anniversary of the decision by the Liberal Government of 1908, led by H. H. Asquith, to introduce the first state pension to guarantee an income for those people too old to work, a bold and progressive policy to deliver financial security for the poorest pensioners.

In recent years, the state pension system has become overly complex and difficult to understand with the introduction of proportional eligibility based on national insurance contributions, the State Earnings-Related Pension Scheme, the State Second Pension, and the mass means-testing of pensioners.

Margaret Thatcher's Conservative Government broke the link between earnings and pensions in 1980, resulting in the diminishing value of pensions in relation to earnings.

Conference is concerned that: i) Despite recent reforms, in 2018 around 2.6 million or 39% of women over pension age will still not be entitled to the full Basic State Pension compared to just over 400,000 men. ii) Pensioners no longer share in the proceeds of growth in Britain; the value of the Basic State Pension in comparison to average earnings is now lower than thirty years ago. iii) 2.2 million of today's pensioners live in poverty. iv) By 2010 55% of pensioners will be reliant on complex and intrusive means-tested benefits to make ends meet. v) An estimated 7 million people are not saving enough to provide them with an income they would consider sufficient in retirement.

Conference reaffirms the Liberal Democrat commitment to: a) Deliver security and dignity in retirement for every citizen. b) Create a simple, coherent pension system which everyone can understand. c) Ensure the pension system is equitable and does not discriminate between men and women. d) Guarantee pensioners a defined income in retirement to make sure they benefit from every penny they save.

Conference therefore calls for:

1. The centenary of the state pension to be marked by the immediate reintroduction of the link between the Basic State Pension and earnings.

2. The state to honour its responsibility to keep every pensioner out of poverty by moving towards the introduction of a Citizen's Pension, based on residency not contributions.

3. The end of mass means-testing of pensioners, so that every working adult can have the confidence that they will receive the full benefit of additional provision that they make for themselves.