United opposition to further means-testing

Thursday March 21, 2002

In a rare joint press conference between the two main opposition parties, spokesmen from the Conservatives and Liberal Democrats today called on MPs to stop a move towards greater means-testing for pensioners.
The shadow work and pensions secretary, David Willetts, and the Liberal Democrat work and pensions spokesman, Steven Webb, claimed that the government's new pension credit would lead to 5.5 million of Britain's 11 million pensioners facing means-testing for benefits.
The bill to introduce the pension credit, which aims to reward pensioners for saving, is due to receive a second reading in the House of Commons on Monday.
But Mr Willetts warned that it would create a "new era of dependency" while Mr Webb said its "eye-watering complexity" would do nothing to help people plan for their retirement.
Mr Willetts said take-up of means-tested benefit among pensioners was already low, with about a third of eligible people not claiming the minimum income guarantee during 1999-2000, and the "appalling complexity" of the pension credit was bound to make the low take-up problem even worse.
He added that the pension credit would not solve the problem of pensioner poverty because it removed the incentive for workers on low incomes to save for their retirement.
Both parties are calling on MPs to support an amendment to the bill setting out an alternative approach to pensions.
The amendment calls for the bill not to be given a second reading, and adds that the additional expenditure would be better diverted towards improving the basic state pension, particularly for older pensioners.
Mr Willetts said: "We know that poorer pensioners tend to be older pensioners. Increasing the pension for older pensioners is therefore well targeted on poverty without yet more means-testing."
He added that if the pension credit was introduced, the Conservatives would not take it away from pensioners who received it.
Mr Webb said: "The pension credit takes us even further down the road of mass means-testing for pensioners. This is a completely misguided strategy.
"The answer to the present pensions crisis is not more means-testing but a decent basic state pension on which people can build their savings.
"We believe that targeting poorer pensioners is best achieved by pension rises for older pensioners, many of whom are elderly widows on meagre incomes."
Mr Willetts added that former social security minister Frank Field, who was recovering at home after being taken to hospital yesterday, had asked him to express his opposition against increased means-testing.

From Ananova  

?1.2bn of pensioners' benefits going unclaimed
More than ?1.2 billion of benefits are going unclaimed each year because pensioners do not understand what they are entitled to.
The findings come in research carried out by Prudential.
It found that around three million pensioners are missing out by not picking up income support, housing benefit and council tax benefit.
The main reason for pensioners' failure to collect their full entitlement is that they do not realise they are eligible, with 43% claiming they do not know they can get the extra cash.
A further 23% said they did not even realise the additional benefits existed, while other pensioners were put off by red tape with 18% saying the process was too complicated.
Older pensioners are the more likely to be put off by the claims process, with 28% of over 75s saying the procedure is too complicated, compared with 7% of retired people aged under 64.
Around 12% said they did not want state benefits because they would rather support themselves from their savings, with 28% of people aged over 75 citing this as a reason for not claiming everything they were entitled to.
Prudential found that people living in Wales and East Anglia were most likely to be missing out on additional income, with 38% and 25% respectively not claiming everything they were entitled to.
By contrast just 5% of pensioners in Yorkshire and Humberside, and 8% in the North West and Greater London were missing out on the additional income.
Taylor Nelson Omnibus questioned 435 retired people between January 11 and 17.