Government allowing state pension to wither away

9.47.25am BST (GMT +0100) Mon 21st Jun 2004

The value of pensions are falling under the Labour Government according to Mike Bell

Councillor Mike Bell, the Liberal Democrat Parliamentary Spokesman for the Woodspring Constituency, has slammed the Government's record on pensions after he published new figures, which showed the value of the state pension has fallen since Labour came to power.

The Department of Work & Pensions' answer to a parliamentary question tabled by Lib Dem MP John Barrett has shown that the value of the state pension compared with average incomes stands at just 30%.  This is down from 35% when Labour came to power in 1997.

Whilst the relative value of the state pension has fallen, the Government has instead focused on means testing through the pension credit.  However, take-up of the credit remains little more than 50%.

Commenting, Mike Bell, said:

"Despite a lifetime of contributing to society, pensioners in North Somerset and throughout the UK are still getting a raw deal in return from this Government.  These figures show that since coming to power, Labour has allowed the state pension to wither on the vine.

"Rather than forcing pensioners onto means testing, which many older people find complicated and degrading, the Government should be boosting the basic state pension.  This is the only way to guarantee the poorest pensioners get the money they need and ensure everyone has dignity in their retirement.

"Coupled with the continuing unfairness in the Council Tax, it is no wonder that pensioners living in towns like Clevedon, Nailsea and Portishead are up in arms about the record of this Government.

"The Government must increase the basic pension - and do it now."

ENDS

Notes to Editors

• Information was received through the following parliamentary question and answer.

John Barrett: To ask the Secretary of State for Work and Pensions what percentage of average income the state pension represented in each year since 1994.

Malcolm Wicks: The information is not available in the format requested. The information as is available is in the table.

Percentage of average income

1996-97 35

1997-98 34

1998-99 31

1999-2000 31

2000-01 29

2001-02 30

Notes:

1. State pension figures are derived from a five per cent. sample of DWP administrative data taken at March in each year.

2. Average income for each financial year is median gross weekly individual income taken from Individual Incomes 1996/7-2001/2 published by the Department for Work and Pensions. The Individual Income series used is based on the Family Resources Survey which has been available since 1996.

3. State pension is calculated as the maximum rate of basic state pension plus the average amount of additional state pension in payment for recently retired men aged 65 and women aged 60.

4. The figures have been rounded to the nearest percentage point.