» Monday, October 11, 2004


Asked if the Government would accept that there was a £57bn a year shortfall in the pensions system and that the cut in tax dividends were to blame while pensioner tax credits were a disincentive for poorer people to save for their old age, the Prime Minister’s Official Spokesman (PMOS) said he thought it would be more useful to wait for the Pensions Commission’s interim report to be published tomorrow rather than engage in speculation about its content. In general, however, he would point out that the change to tax dividends had been part of a wider package of corporation tax reforms, including cuts to the rate at which corporation tax was paid.

In answer to further questions, the PMOS said that as the Prime Minister was making clear today, it was important to try to reach a genuine consensus regarding a problem which was not limited to the UK alone but was one facing all major developed countries. It was also important not to lose sight of the measures that had already been taken to deal with the short term problem of those who had lost their pensions and to give security to those whose pension funds might get into trouble in the future. However, we also needed a strategy to deal with longer term issues – hence the work of the Pensions Commission. As the Prime Minister was underlining this morning, decisions which were taken today would be felt for decades to come. That was why it was important to address these matters in a considered way.

Asked if Downing Street continued to believe that the pensioner tax credit was a good idea, the PMOS said that it was important to recognise the amount of money that had been spent on pensions. Since 1997, the Government was spending an extra £10bn on pensioners – £6bn more than if the earnings link had been maintained. Half of this extra spending – nearly £5bn – was going to the poorest third of pensioners since the Government believed that these were the people who needed it most. We made no apology for that. In answer to further questions, the PMOS said that the purpose of the ongoing information campaigns was to alert people to what was their right. Uptake of the tax credits was clearly on the increase.

Asked if the need to address the pensions issue was at or near the top of the Prime Minister’s in-tray, the PMOS said that pensions was clearly a critical area for the Government and those directly affected, i.e. all of us. What was important, however, was to recognise the measures that had been taken in the short term, what we were doing in the medium term and to reach a consensus, if possible, about the longer term. Undeniably this was a problem issue. However, it was important not to give a knee-jerk response. Tomorrow, the Pensions Commission would give its analysis of the situation. It would publish its full report next year. Given the seriousness of the issue, it was important to proceed in a serious, rational and considered way.

Briefing took place at 11:00 | Search for related news


  1. I would very much like to know why if one has a pension, albeit goverment or private that, if, as my husband, who was a Consultant in A&E has been medically retired, are:

    Unable to claim incapacity bebefit because his gross income exceeds the amount of benefit, albeit by a small amount.

    Why persons are able to have claim to the above , if they have been wise enough not to have taken out a pension, but invested there money, and receive a large income.

    When one fills out the claim form the only information on income required, is on any monies received is from a pension.

    There is a great push by goverment to encourage people to join a pension scheme, there should also be information attached stating that it may affect any future assistance they may need in the event of ill health.

    Comment by patricia powell — 28 Apr 2005 on 12:45 pm | Link
  2. From my experience if one member in a marriage has a private pension they are penalised as their joint pensions are always taken into consideration when trying to claim for any sort of government funding or treatment In our case we have both worked hard all our lives, my husband for 50 yrs. including 5 yr.service overseas, in both D.Day landings and Burma. Like you we are just over the limit for financial help.We still have a mortgage but are afraid to use our savings to pay some of it off in case of emergency Because we have saved, not smoked or drank we are considered as ‘comfortable’ even though we cannot afford holidays, whilst some of our neighbours who have come to this country, never worked, have large families and can go abroard regularly can claim every benefit their is.It does not pay to be English.I sometimes wish I had not been made to pay into a government pension scheme

    Comment by w.tunley — 1 May 2005 on 8:48 pm | Link

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