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BeeHive  >  BeeLines  >  Pensions in Parliament

Pensions in Parliament

Hi!  Well there’s plenty going down on the pensions front in the Mother of all Parliaments again it seems.  We’re going to try to keep up with it all for you over these crucial next few weeks as our future pension landscape is being radically changed once again.  We’re going to attempt to pick up on everything to do with pensions over the coming weeks, collect it all together on a weekly basis, and publish it for you to read through or pick through as you wish.  Obviously we can only do that a week in arrears each time (and a week’s a long time in pensions these days), but you may want to read it all anyway.  Here’s the stuff up to the end of last week…

Steve Bee

23 May 2006

Good News



Financial Assistance Scheme - 16 May 06
Asked by Jenny Willott (LD)

Financial Assistance Scheme - 16 May 06
Asked by Stuart Jackson (LD)

Financial Assistance Scheme - 16 May 06
Asked by Don Touhig (Lab)

Pensions - 16 May 06
Asked by Mark Oaten (LD)



Better late than never: Movement on pension reform is welcome news - 12 May 06

Brown defeated on pensions reform - 12 May 06
Philip Hammond (Conservative Party)

Age Concern Response to plans to link basic state pension to earnings - 12 May 06
Age Concern

MPs back Turner proposals - 15 May 06

Pensions White Paper must deliver for self-employed people - 15 May 06

Pension funds back forced AGM vote disclosure - 15 May 06

'Grey' legislative programme launched by pensioners parliament - 16 May 06

Transition Trade-offs: Options for state pension reform  - 17 May 06

Publication of 5th Report - 18 May 06
Treasury Committee

White paper must be fair and deliver pensioner dignity - 18 May 06
Conservative Party

New pensions settlement endangered by mass means-testing - 18 May 06
David Laws (Liberal Democrats)


House of Commons Written Answers

Financial Assistance Scheme1

Jenny Willott
To ask the Secretary of State for Work and Pensions whether his Department will seek an increase in funding of the Financial Assistance Scheme in the next spending review; and if he will make a statement. [69544]

James Purnell
The Prime Minister recently announced to the House of Commons that we will expedite the review of the Financial Assistance Scheme and its funding.

Mr. Stewart Jackson
To ask the Secretary of State for Work and Pensions when former employees of Triplex Components Group Ltd. of Walton, Peterborough will have their cases expedited under the financial assistance scheme; and if he will make a statement. [70434]

James Purnell
The Triplex scheme has been determined to be a qualifying pension scheme. As the scheme is still in the process of winding up, the FAS operational unit will not yet be able to calculate final payments. However, trustees are able to request that the FAS scheme manager make initial payments to eligible survivors, or to those members who have already reached the age of 65 or who are terminally ill.

Mr. Touhig
To ask the Secretary of State for Work and Pensions what the projected funding requirements are of the Financial Assistance Scheme in (a) 2007 to 2010 and (b) 2010 to 2013. [70889]

James Purnell
It will not be possible to provide firm estimates until we have assessed the eligibility of each scheme and its members. Our current estimates in current cash terms, based on data provided by a number of schemes in late 2004, are shown in the following table. The estimates will change in the light of improved information. Over the longer term we estimate expenditure to be broadly in line with £20 million over 20 years.

Pay 80 per cent. to those within three years of Scheme Pension Age

£ million, cash













16 May 2006 : Column 917W



Mr. Oaten
To ask the Secretary of State for Work and Pensions if he will ensure that the pension forecasting team states in correspondence with inquirers whether national insurance data has been taken into account when making a pension forecast. [70231]

James Purnell
Customers are advised in their state pension forecasts that the information is based on their national insurance (NI) record. This information is provided to the Department for Work and Pensions (DWP) by Her Majesty's Revenue and Customs (HMRC) and sourced from their national insurance recording system (NIRS).


Press Releases

Better late than never: Movement on pension reform is welcome news says IoD3

It is welcome news for all of us that the Prime Minister and Chancellor are finally reaching an agreement on how to tackle the UK’s increasing pension’s crisis; although the IoD has been urging the Government to move the pension’s crisis further up the political agenda for months.

We urgently need to simplify an overly complex and unfair pensions system whilst encouraging our future pensioners to save.

Therefore the IoD proposes:

  • a progressive reduction in Stamp Duty on equity transaction for pension funds;
  • a boosting of the incentives of later retirement by linking longer working lives with the size of the tax-free lump sum. The IoD proposes boosting the incentive for longer working lives by increasing the size of the tax-free lump sum that can be withdrawn from a pension fund on retirement. The proposal is that the tax-free lump sum (25% at present) be increased by 5% per annum for each year worked beyond the state pension age up to a maximum of five years (i.e. a maximum tax-free lump sum of 50%).
  • closure of public sector defined benefit schemes to new entrants;
  • annual publication of total future liabilities of public sector schemes;
  • a gradual raising of the retirement age to 70;
  • an end to means testing for the State Pension by setting a new universal level at £110.

We look forward to hearing the greater details of what the Government will actually do in the weeks ahead.


Hammond: Brown defeated on pensions reform4

Commenting on the news that Tony Blair and Gordon Brown have reached an agreement on Pensions Reform which would see the Basic State Pension re-linked to earnings, Shadow Work and Pensions Secretary, Philip Hammond said:

“The news that Gordon Brown has lost his battle with Tony Blair over pension reform will come as a huge relief to many people.

“We have been calling for the Basic State Pension to be re-linked to earnings since before the last election and now it seems that, despite objections from the Chancellor, the Government have committed to doing just that.

"We will need to look carefully at the detailed proposals when the Government publishes them and in particular, we will want to see greater fairness to women in the system. However, on the face of it this is an important first step to securing dignity in retirement for Britain’s pensioners.”


Age Concern Response to plans to link basic state pension to earnings, leaked today5

Gordon Lishman, Director-General of Age Concern England said:

“Rumours that the link between Basic State Pension and earnings may be restored could be good news for future pensioners. However, a delay of at least six years before this might come into action is bad news for today’s pensioners and those retiring before 2012.

“In his report, Turner noted that the real value of the Basic State Pension will have fallen to just £75 in real terms by 2010. This will be devalued further if the Government does not act sooner than 2012.

“Already 1.8 million* pensioners are living in poverty and two in five** of those entitled to Pension Credit are still not receiving it. Making pensions work more effectively is crucial for the pensioners of today and tomorrow. Increasing the Basic State Pension to at least £114 per week and reducing means-testing for Pension Credit and other benefits would be a start.

“The Government must seize the once-in-a-generation opportunity to introduce radical pensions reform to help future generations avoid poverty in retirement.”

Notes to editors
*   Annual household below average income figures, DWP, March 2006
**  Most recent figures from DWP Pension Credit Estimates of Take-Up in 2004/ 2005.


MPs back Turner proposals6

Index linking and a better deal for women top MPs pension choices

There is strong support across the political divide to index link the state retirement pension to earnings, and to give women a fairer deal from the state pension according to a survey of MPs carried out by the Peoples' Pensions Coalition - a lobby group set up by Age Concern, Help the Aged, the TUC and Which?.

While Labour MPs strongly back compulsory employer contributions with an employee opt-out, as recommended by Lord Turner's report, there is less support for compulsion among opposition parties.

But if the scheme does go ahead, there is again considerable cross-party consensus about how the scheme should work. MPs were presented with a range of objectives that the scheme should meet. Each of the major party's MPs put portability when people choose jobs as their top objective, closely followed by "having pensions assets ring-fenced and held in trusts so legal ownership of the pension resides with the individual". "Providing a simple single default scheme that would suit most employees (with the choice to choose other savings vehicles)" came third - again with all-party consensus. "Keeping costs down to (the Turner recommended) 0.3%", was also seen as important by MPs.

TUC General Secretary Brendan Barber said, "This is an encouraging survey. It shows that there is the basis for a real consensus behind the recommendations set out in the Pensions Commission report. Restoring the link with earnings has long been a trade union demand, and now commands all party support. Compulsory employer contributions are clearly supported by the majority of MPs, and while there is doubt on opposition benches, my hunch is that once these modest proposals have been implemented they will quickly become as uncontroversial as the minimum wage." 

Mick McAteer from Which? said:

"MP's are clearly saying that the certainty, portability and personal control of a Turner style NPSS are more important than the proliferation of choices offered by the ABI industry model which will undoubtedly add cost for the consumer and reduce their final pension substantially. We would expect this sentiment to be reflected by the government in the upcoming White paper."

Mervyn Kohler from Help the Aged said:

"The level of political consensus amongst MPs around improving the state pension was truly impressive. With the Treasury now indicating its agreement the government must make changing the state pension an urgent priority so that pensioners today feel the benefits of an improved system. But lets not forget that if we are all to work longer we also need to reform the UK labour market to make it more flexible and accessible to older employees."

Gordon Lishman, Director-General of Age Concern England said:

"Such broad political support for bold pensions reform is welcome, particularly MPs' almost universal support to increase women's eligibility for the full Basic State Pension.

"Millions of women face poverty in later life simply because they have taken time out of the workplace or switched to part-time jobs to care for their families.  Reform to the outdated, inflexible pensions system is vital to help prevent future generations of women following their mothers and grandmothers into poverty.

"Increasing the Basic State Pension and linking it to earnings, reducing means-testing for benefits and encouraging people to save via a National Pensions Savings Scheme could all help to reduce pensioner poverty in the future.

 "The government must not squander this once-in-a-generation opportunity to introduce radical pensions reforms and address the scandal of women's pensions."


ABI: Pensions White Paper must deliver for self-employed people7

Self-employed people get a raw deal from the pensions system, according to new research published today by the ABI (Association of British Insurers).

Helen McCarthy, the ABI’s Head of Pensions and Savings Development, said:

“Self-employed people make up one-eighth of the workforce, but a quarter of all UK non-savers. The pension system must be made fairer for self-employed people, and the White Paper on pension reform should deliver this.”

The ABI believes the Government should:

  • Make self-employed people eligible for the State Second Pension by increasing their NI contributions;
  • Automatically enrol self-employed people into a new, low cost savings scheme;
  • Provide better information about the importance of saving for retirement through self-employment packs; and
  • Index the Basic State Pension to earnings (as proposed by the Pensions Commission).

‘Serious about Saving: Improving pension provision for self-employed people’ is available by clicking on the link below.

Further details of the ABI’s proposals for UK pension reform can be viewed at

The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

Serious about Saving: Improving pension provision for self-employed people


Pension funds back forced AGM vote disclosure8

The results of the first ever survey of pensions funds on voting disclosure show that 93 per cent think fund managers should publicly disclose how they vote in company AGMs and eight in ten think that pension funds which direct their own voting should also publish their voting records.

The survey of members of the TUC's Member Trustee Network, which governs pension funds worth over £300 billion combined, demonstrates that pension funds support the government's reserve power to force investors to publish voting records if they fail to do so voluntarily. The measure, which is contained in the Company Law Reform Bill currently going through Parliament, is opposed by employer and pension fund lobby groups and the Conservatives.

Despite increased participation 40 per cent of fund managers did not take part in the TUC's 2005 Fund Manager survey and nine out of ten fund managers who responded but don't currently publish their voting records said they had no plans to do so in the future.

This year's survey will be published at a major TUC pension fund trustee conference on Monday 5 June at Congress House. 'Pensions: from reform to reality', will tackle pensions issues concerning trustees in the morning and investment and corporate governance issues in the afternoon, through a mix of expert political and industry guest speakers and discussions. The full list of speakers will be published shortly.

TUC General Secretary Brendan Barber, said:

'Pension funds clearly want to shed some light on their relationship with investors and how their members' pensions are managed. This shatters the 'client confidentiality' argument of those in the City who want to keep voting records covered up. Clients want the records of how their funds are voted on but they also want to share the information and see how other managers govern investments. At the moment the TUC Fund Manager Survey is the only authoritative source that provides this information but it remains to be seen whether further disclosure will be forthcoming without a mandatory approach.'


- Of the 120 TUC Member Trustee Network surveyed recently by email 93.3% believed that fund managers should publicly disclose how they vote at company AGMs and only 4.2% disagreed. Eight-five per cent agreed that pension funds which direct their own voting (i.e., do not delegate voting decisions to fund managers) should publicly disclose how they vote at company AGMs and only 6.7 % disagreed.

- The Company Law Reform Bill currently in the House of Lords contains a reserve power 

- The TUC Fund Manager Voting Survey 2006 covers 17 AGM items in the 2005 proxy season.

- Twenty-eight fund managers responded voluntarily to the 2005 Fund Manager Voting Survey, a 65 per cent increase on 2004. In the 2005 survey, the TUC obtained in total voting records for just under two-thirds of fund managers surveyed (37), a 10 per cent increase from the 2004, and 20 per cent more than the 2003 survey. Of the 22 fund managers who said they don't currently disclose their voting records in last year's survey, only two intend do so in the future. Twenty fund managers, 40 per cent of the sample, failed to respond to the survey or declined to take part.


'Grey' legislative programme launched by pensioners’ parliament9

The fourteenth annual National Pensioners’ Parliament begins today (Tuesday) at Blackpool's Winter Gardens.

During the three-day event organised by the National Pensioners Convention (NPC), over 2000 delegates from across the UK will debate 11 parliamentary-style bills, which when taken together will create the first ever comprehensive legislative programme to benefit Britain’s 11m pensioners.

Among the items to be discussed include:

  • A state pension of £114 a week, linked to earnings and paid equally to all men and women
  • Abolition of the council tax
  • Free long-term and personal care
  • Winter fuel allowances to be linked to energy prices
  • Free nationwide travel on all forms of public transport
  • Measures to tackle elder abuse and ending discrimination

To support the legislative programme, the NPC’s second annual Age Audit will also be published, offering a snapshot of life for older people in today’s Britain. Key figures will show continued pensioner poverty, rising winter mortality, significant malnutrition and long-term illness and the fear of crime.

The themes contained within the bills and the Age Audit will also be echoed by a number of speakers during the opening session of the Parliament, who will support the ongoing campaign for pensioners’ rights. Delegates will hear Brendan Barber (TUC), Kate Hoey MP, John Lister (Keep Our NHS Public), Billy Hayes (CWU) and Paul Routledge (Daily Mirror) – alongside the veteran campaigner Jack Jones.

The Parliament’s programme is :

· Tuesday 16 May (1-4pm)
March from the North Pier to the Winter Gardens, Blackpool
Rally with guest speakers (outlined above)

· Wednesday 17 May (10-4pm)
Debates on 11 parliamentary-style bills

· Thursday 18 May (10-12pm)
Sessions on local campaigning

George Henderson Vice President of the Transport and General Workers Union Retired Members Association and Chairman of NPC Scotland said:

"The Transport and General Workers Union Retired Members Association of 80,000 members is supporting the National Pensioners Convention’s call for the government to:

Raise the state pension from £84.25 to at least the level of the guaranteed credit (£114 a week) now

Restore the link between pensions and earnings pre and post retirement for men and women now

"The government must realise that the state pension is totally inadequate and millions of older people, many of them women are struggling to cope with rising bills and the cost of living. The latest Turner report has done nothing to ease the situation and now the minister must act. The government has said it wants a consensus on the issue of pensions reform, but no-one wants to listen to the views of today’s pensioners. The state pension must be raised to at least £114 a week as a matter of urgency and paid to everyone now.

"Many pensioners throughout the country are angry that, with the official poverty level at £123 a week, their state pension is still less than £85 a week and bears no relationship to the cost of fuel, council tax and other bills they have to pay. Official figures show that well over 2.5 million older people live below the poverty line, over 31,000 die every year from the cold and one in seven are at risk from being malnourished.

"The country can afford to pay everyone a decent pension, not least by using the surplus in the National Insurance Fund currently estimated at £34.6bn and growing to £60bn by 2010. We don’t have time to wait for more reports and commissions – we want something done now. "


Transition Trade-offs: Options for state pension reform10

This paper analyses in detail 8 alternative state pension reform options that make different trade-offs to those made by the Pensions Commission, and evaluates them against the Government's 5 tests for state pension reform.

Click here for more details


Publication of Fifth Report11

The design of a National Pension Savings Scheme and the role of financial services regulation.

The Treasury Committee will publish its Fifth Report, The design of a National Pension Savings Scheme and the role of financial services regulation (HC 1074), on Sunday 21 May at 00.01 hours. This follows evidence taken by the Committee from Lord Turner, the Chairman of the Pensions Commission, the Financial Services Authority and industry and consumer representatives.

Embargoed copies of the report will be available to witnesses, government departments and accredited members of the press from 12.00 noon on Friday 19 May at the reception desk at 7 Millbank, Westminster London SW1P 3JA. Embargoed copies will also be available in the press gallery, House of Commons on that day.

The Chairman of the Committee, Rt Hon John McFall MP, will be available for interview from 12.00 noon on Friday 19 May. Journalists can contact his office on 020 7219 3521 or his mobile phone on 07730 987 802.

Reports can be purchased from the Stationery Office bookshops (tel: 0870 600 5522). The full text will also be available on the internet on Monday 24 April:


  1. Committee Membership is as follows: Rt Hon John McFall (Chairman), Lorely Burt, Mr Jim Cousins, Angela Eagle, Mr Michael Fallon (Chairman, Sub-Committee), Mr David Gauke, Ms Sally Keeble, Susan Kramer, Mr Andrew Love, Kerry McCarthy, Mr George Mudie, Nr Brooks Newmark, Mr Mark Todd, Peter Viggers.

Further information:

Media Enquiries: Luke Robinson, Tel 020 7219 8895 / 07834312705, email –

Specific Committee Information: Tel 020 7219 5769, email -

Committee Website:


White paper must be fair and deliver pensioner dignity12

Commenting on John Hutton’s speech on pensions to Fabian Women’s Network this evening, Shadow Work and Pensions Secretary, Philip Hammond, said:

“A sustainable solution to the pensions crisis must be fair to all generations and all sectors of society.

“We have long been calling on the Government to remedy the appalling treatment of women in the present pensions system. Women with working records interrupted by child-raising or caring responsibilities must have the opportunity to achieve full state pension rights.

“We welcome John Hutton’s proposals - but the devil will be in the detail of the White Paper when it is published next week.”


  • In retirement, women’s incomes are, on average, just 57% of men’s and 1.3 million older women live below the poverty line (Equal Opportunities Commission press release, 31 January 2005)
  • There are 2.2 million women in total not accruing a basic State Pension, either because they do not work or do not earn enough to make contributions (DWP, Women and Pensions: the evidence, November 2005).
  • The latest figures from the Government Actuary’s Department for 2005 show that less than a third – 30% - of women reaching State Pension Age are entitled to a full basic state pension (ibid).
  • Two-thirds of recipients of Pension Credit are women and half of these are aged 75 or over. At 30 June 2005, 2.18 million women were receiving Pension Credit (ibid).
  • Married or co-habiting women pensioners have, on average, very low personal income compared with married or co-habiting male pensioners. For every £1 received by a married or cohabiting woman, a married or cohabiting man will get £3 and receive approximately twice as much as state benefit, far more in private pension, and more in other income (ibid).
  • Men of all ages typically receive £50 to £100 a week more private pension income than women of the same age (ibid).
  • Only 38% of today’s working age women are contributing to a private pension (ibid).
  • Two-thirds of Pension Credit beneficiaries are women. (Pensions Commission, Pensions: Challenges and Choices, October 2004)
  • 3.1 million women had no second tier pension provision in 2002/03. (ONS, Pension Trends 1, October 2005)
  • Amongst women with children aged five and under, only 15% continue to save for a pension (Scottish Widows, What Women Want: Pensions Designed for the Lives they Lead, October 2005


New pensions settlement endangered by mass means-testing - Laws13

Commenting on Monday’s expected White Paper on pensions, David Laws MP, Liberal Democrat Shadow Secretary of State for Work and Pensions said:

“It now seems that next week’s pension reform proposals will leave Britain with one of the most complex pension systems in the world, including a very low basic state pension, mass means-testing and many people retiring into poverty.

“The acceptance of Lord Turner’s recommendations on the National Savings Pension Scheme, a higher state pension age, and a resumption of the earnings link are all welcome and important. But even after these reforms, the state pension system will not be a firm foundation for preventing poverty or for encouraging more private saving.

“Tony Blair promised a decent state pension and Lord Turner called for a reduction in means-testing. The Government’s proposals seem likely to fail both of these tests. Even if the earnings link is restored from 2012, it seems probable that around half of all pensioners will still be stuck on means-tested benefits.

“Under the Government’s plans the state pension will take until 2028 to reach today’s minimum means-tested level in real terms – this is hopeless.

“The Government have also decided not to scrap the increasingly absurd and complex contributory system. Currently only 24% of women receive a full state pension in their own right and while this system remains, even with a reduction in the number of contributory years required, this is highly unlikely to improve their situation.

“A new Independent Commission is needed to make recommendations for reforms which would put public sector schemes on a fair and affordable basis.”


Notes to Editors:

New figures obtained by the Liberal Democrats show that existing levels of means-testing are already higher than previously thought – covering almost 50% of pensioners and not the 39% assumed by Turner. See Parliamentary Question PQ/06/5066 (25th April 2006).


  1. United Kingdom Parliament, Commons Hansard 16 May 2006, Column 917W.
  2. United Kingdom Parliament, Commons Hansard 16 May 2006, Column 919W
  3. Institute of Directors press release 12 May 2006
  4. Lansons Public Affairs weekly briefing week ending 19 May 2006
  5. Age Concern press release 12 May 2006
  6. Trades Union Congress press release 12 May 2006
  7. Association of British Insurers press release 15 May 2006
  8. Trades Union Congress press release 15 May 2006
  9. Lansons Public Affairs weekly briefing week ending 19 May 2006
  10. Pension Policy Institute press release 17 May 2006
  11. Treasury Committee press notice no. 39 18 May 2006
  12. Lansons Public Affairs weekly briefing week ending 19 May 2006
  13. Liberal Democrats press release 18 May 2006


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