Chapter 5
Older people: Secure today,
prepared for the future
Forward to new opportunities
in old age, not back to poverty
and insecurity
1997: 2.8 million pensioners in poverty,
the poorest living on £69 per week
2005: Minimum income for pensioners
of £109 per week
2010: A long-term settlement for pensions
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Our priority since 1997 has been to tackle pensioner poverty.
Nearly two million pensioners have been lifted out of absolute
poverty as a result of Labour’s measures, which are now getting
on average an extra £2,000 a year to the poorest third.Our
priorities now are to build a national consensus for tomorrow’s
pensioners, combining public and private pension
schemes to build security in retirement, and to extend the
quality of life of older people.
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The new Labour case
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By 2020 there will be more people over the age of 80 than under the
age of five.For a progressive government there can be no compromise
of our duty to today’s pensioners. But while we fulfil that duty we must
also see old age as a time of independence and opportunity. On pensions,
our aim is a system that provides security and decency for all,
which encourages and rewards saving, and is financially sustainable.
And because, more than anything, people need certainty to plan for
the future we will seek a national consensus – cross-party, cross-generation
– for long-term reform.
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Tackling pensioner poverty:
The success of the Pension Credit
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In 1997, 2.8 million pensioners were living in poverty – with the poorest
expected to live on just £69 per week. Labour’s Pension Credit
now means that no pensioner need live on less than £109 per week. It
rewards saving and helps over three million pensioners, with women in
particular benefiting.We will increase Pension Credit in line with earnings
up to and including 2007-08.
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All pensioners have benefited from improved universal benefits like
the state pension, the Winter Fuel Payment (now worth £300 per year
for the over-80s), help with council tax and free TV licences for the
over-75s.This year, all households expected to pay council tax that
include anyone over 65 will receive £200 towards the cost of council
tax, and the following year there will be free, off-peak local bus travel in
England for the over-60s.
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Millions of pensioners have benefited from our fuel poverty programme.
Our goal is to eliminate fuel poverty for vulnerable groups by
2010, and for all by 2015.
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Pensions for the generation of tomorrow
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The generation retiring in the future will be different in many ways
from its predecessors.Their jobs will have been different; the expectations
of women will be transformed; their retirements will be longer and
healthier.We have begun to lay the foundations for the pensions system
of tomorrow, for example, by: introducing the State Second Pension to
ensure carers, low earners and disabled people have a chance to build
up a decent pension for the first time; encouraging automatic enrolment
into company pension schemes; creating the Pension Protection
Fund; enabling pensioners for the first time to work part time and draw
down their occupational pension; as well as offering an increased state
pension or lump sum for those deferring their pension.We will work to
increase the proportion of pension fund trustees nominated by scheme
members, along with access to proper training.We will keep this issue
under review, with consultation in the expectation of further progress
to 50 per cent member-nominated trustees.
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We need to forge a national consensus about how we move from a
pension system designed for today’s pension problems to one that is
right for tomorrow’s.We appointed the Pensions Commission to look
into the future of pensions and its second report is due in autumn
2005.We are clear about the goals of a reformed system. It must tackle
poverty, provide everyone with the opportunity to build an adequate
retirement income, and be affordable, fair and simple to understand.
In particular it must address the disadvantages faced by women.
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New rights, new choices
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Many older people want to carry on working in their 50s and 60s.The
welfare state should be there to help them. Older people with their
skills and experience are potentially an enormous resource.That is
why we set up the New Deal for the Over-50s, with over 150,000 older
people helped back to work.
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We also need to put the force of the law on the side of older people
who wish to continue working. Companies will no longer be able to
force people to retire before the age of 65 except where specifically
justified. All employees over the age of 65 will have the right to request
of their employer that they be allowed to carry on working. After five
years we will review whether there should be any fixed retirement ages.
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We will give older people greater choice over their care.For every older
person receiving care or other support, we want to offer transparent,
individual budgets which bring funding for a range of services, including
social care, care homes, and housing support such as adaptations,
maintenance and cleaners together in one place.We will pilot individual
budgets for older people by the end of this year.
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We will make the most of the opportunities of an older population by
creating a new programme for older people to be mentors and
coaches to gifted and talented young people.We will also work with
voluntary organisations to help expand grandparent and toddler
groups across the country.
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Support across the generations
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The challenge of balancing work and family applies to parents but also
to people looking after an elderly or sick relative – now one in five
adults. Since the introduction of the right to request from their
employer flexible working arrangements, a million parents have
changed their working hours.We are consulting on a similar right for
carers of elderly or sick relatives.
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The choice for 2010
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The Tories are the party of pensioner poverty.When they left
office in 1997, one in four pensioners was living in poverty and
the poorest pensioners were expected to get by on just £69 a
week.They would phase out the Pension Credit and abolish the
State Second Pension, hurting most those most in need.When
the one thing we all need is certainty, the Tories have admitted
they have absolutely no plans for how to fund their pensions policy
beyond four years.The choice is whether we go forward with
new Labour with today’s pensioners provided for and poverty
falling, a national consensus on fair and sustainable long-term
reformand the policies to give older people enhanced rights and
choices. Or back with the Tories to rising levels of pensioner
poverty and unending insecurity for tomorrow’s pensioners.
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