The Government believes that people deserve dignity and respect in old age, and that they should be provided with the support they need. That is why we have delivered the biggest ever rise in the basic state pension. It is why we are protecting universal benefits for pensioners, simplifying the state pension, and introducing auto-enrolment pension schemes in the workplace.

The bigger picture

Iain Duncan Smith• This Government has delivered the biggest ever cash increase to the state pension – in April 2012, the state pension increased by £5.30 a week. This is thanks to our triple lock, which makes sure the basic state pension will always rise by the highest of average earnings, inflation, or 2.5 per cent.

• David Cameron was elected on a promise to protect universal benefits for pensioners and that is what he has done. Conservatives in Government have protected these benefits including: the winter fuel allowance, free TV licenses, free bus passes and free prescriptions.

• We are reforming the complex state pension system, so that there is a single-tier basic state pension. This will deliver a fair, sustainable, simple state pension.

• We have introduced automatic enrolment – so that most people in work are automatically included in a workplace pension scheme. This will boost the number of people saving for their pension, which plummeted under Labour.

Biggest ever cash rise in the state pension

Restoring the earnings link to the state pension with the triple lock.

Action to date

• This year, the Government increased the state pension by the biggest ever cash amount.

• The Government has restored the link to earnings for the basic state pension, which is now uprated by the highest increase of earnings, inflation, or 2.5 per cent.

• In April 2012, thanks to the triple lock, the basic state pension rose by £5.30 a week – the biggest ever cash rise in the state pension.

Planned actions

• The state pension will now always rise in line with inflation, earnings or 2.5 per cent – whichever is the higher.

Protecting universal benefits for pensioners

Action to date

• David Cameron has made it clear that he was elected to protect universal benefits pensioners and that is what he will do.

Planned actions

• Universal benefits for pensioners have been protected, despite the tough economic times.

Reforming the state pension

Action to date

• The amount of state pension money paid out to pensioners can differ by more than £200 a week – that's a difference of £10,000 a year. State pension regulations have multiplied over recent decades and the system has become so complex that people have no way of working out what they will get a week, and can't budget properly for their needs. A single-tier state pension will restore simplicity and give people certainty instead of chance. And it will provide a sure foundation for further saving.

Planned actions

• The state pension is made up of the basic state pension and various additional state pension entitlements. This complex system will be replaced by a simple flat-rate state pension for new pensioners set above the level of the means test, currently estimated at around £140 a week. A White Paper will set out further details later this year.

Introducing auto-enrolment

Introducing automatic enrolment into workplace pensions.

Action to date

• Pension automatic enrolment is a vital reform and the Conservatives have made it a reality. Automatic enrolment will see people being included in their workplace pension scheme without having to do anything, unless they choose to opt out. This scheme will get up to nine million more people saving into a workplace pension and for many it will be the first time they have had the opportunity to save.

• Automatic enrolment will allow people to start planning for their retirement and this will make it easier for them to start putting something aside, along with a contribution from their employer.

Planned actions

• The process of automatic enrolment is taking place over the next 6 years. The biggest companies will have to start automatically enrolling their workers from October 2012 to February 2014. Medium-sized employers will start in April 2014.

• Small firms are exempt from having to introduce automatic enrolment in this Parliament so that smaller employers have some breathing space. Small employers who employ under 50 people will have to start automatically enrolling their workers from June 2015. New employers who started employing people after April 2012 will have to start automatically enrolling their workers from May 2017.

Reforming public sector pensions

Action to date

• We are reforming public sector pensions so that they offer a good deal that will last. They ensure that public sector workers continue to receive pensions among the very best available.

• As life expectancy increases and the pensions bill continues to rise, we need to ensure that the costs are manageable and sustainable for taxpayers, whilst also ensuring that these pensions are amongst the best available for public sector workers.

• The Government has proposed and negotiated reforms to Public Service Pension Schemes. With savings of £65 billion over the next 50 years, the reforms are a good deal for taxpayers, as well as public sector workers.

Planned actions

Our reforms, based on Lord Hutton’s independent review, mean:

  • Public sector pensions will shift from final salary schemes to career average schemes - many staff will be able to retire on a bigger pension than they expect today.
  • The normal pension age for public sector employees will become linked to state pension age.
  • Those within ten years of retirement are protected so that there is no change in their pension.
  • Public sector pensions will remain among the very best available.

These reforms are going through parliament in the Public Service Pensions Bill.

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