Memorandum submitted by UNISON (PC 19)
In respect of the proposals for pension credit
in a letter that was sent to Alistair Darling
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.
Head of Pensions
11 January 2002
f 33 See Appendix 15. Back