Beaconsfield Liberal Democrats review pension policies

10.00.00pm UTC (GMT +0000) Tue 20th Jan 2004

At a political meeting on January 20, 2004, Beaconsfield Liberal Democrats compared the party's policy of increases for all pensioners with the government's means-tested Pension Credit scheme.

Liberal Democrats fought the last general election proposing a minimum £5 increase in the state pension, with £10 more for those over 75 and £15 more for those over 80.

Labour introduced means-tested Pension Credit on October 6, 2003 which gives bigger increases but only to those who successfully apply for them. On the government's own estimate, only 72% of those entitled to a bigger pension are expected to apply for one, either because they are embarrassed to ask or daunted by the complexity of the application procedure. The government has also had to employ hundreds of civil servants to administer the scheme.

During the meeting Liberal Democrats also examined the underlying reasons for the decline in employers' defined benefit pension schemes. Some of the decline can be attributed to government action such as the withdrawal of tax concessions to pension schemes as soon as Labour came to power but the three-year worldwide decline in stock markets since the summer of 2000 has also had serious consequences for the pensions industry and for pensioners themselves.

Liberal Democrats support the stakeholder pension scheme which compels employers to set up and offer a pension scheme to all their employees. They believe that the public still lacks knowledge and motivation to save for the future and propose that the government has two major tasks:

1. Improve public financial awareness

2. Simplify pension products to make them easier to comprehend and more likely to be taken up.