Select Committee on Work and Pensions Appendices to the Minutes of Evidence


Memorandum submitted by UNISON (PC 19)

  In respect of the proposals for pension credit in a letter that was sent to Alistair Darling[33] at the time of the original consultation back in February. Our original concerns remain. Offsetting 40p in the pound on every pound of occupational and personal/stakeholder pension earned will be a disincentive on current and future generations of the low paid to save towards retirement.

  The average occupational pension of many of our members retiring now is in the region of £60 per week. If this pension was not offset against the MIG the income would be £160 per week from April, which according to our figures and those of Age Concern is just high enough to raise a single pensioner above poverty. As a result of the offset it means that those retiring on this low pension will not be entitled to any MIG and the offset will claw them back into poverty even though they have been contributing to an employers pension scheme for most of their working lives.

  With the drift to money purchase and lower employer contributions it is becoming increasingly harder to persuade the low paid to contribute towards pension provision and a 40 per cent offset will make the job even harder.

Glyn Jenkins
Head of Pensions

11 January 2002

f 33   See Appendix 15. Back

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