Lib Dems challenge Brown on pensions

125,000 victims of collapsed pensions are waiting for a settlement, Lib Dems claim
125,000 victims of collapsed pensions are waiting for a settlement, Lib Dems claim

The Liberal Democrats have challenged Gordon Brown to demonstrate his "ethical domestic policy" by helping all victims of collapsed pensions.

Responding to a government statement on the Financial Assistance Scheme (FAS), which claimed £1.7 billion of assets in occupational pension schemes could qualify for help, Lib Dem work and pensions spokesman Danny Alexander said the statement was "simply more dithering and delay from the government".

"The 125,000 victims of collapsed pensions have been waiting far too long for a fair settlement," he continued.

"Gordon Brown seems to be trying to present an ethical dimension to his domestic policy.


"How he reacts to this issue will show whether that is anything more than spin.

"I hope that Labour MPs will join with Liberal Democrats and other parties tomorrow and do the right thing."

But work and pensions secretary Peter Hain claimed today's review was "encouraging".

"They show there are still significant amounts of money available in the collapsed pension schemes which, if managed carefully, could boost assistance for people who lost their pensions," he said.

"We believe we will be able to move the 80 per cent guarantee from the taxpayer further towards 90 per cent.

"But before we bring forward further proposals we must be sure they can be delivered - to do otherwise would be unfair to those who lost their occupational pension saving."

The review said the value of pension scheme assets could be maximised by the bulk purchase of annuities and pooling assets in a single fund.

In related news, the Lib Dems flagged up significant differences in women's pensions depending on the date of their retirement.

They found that women who retire before changes to the state pension come into place in April 2010 will be up to £27,000 poorer over their retirement than those who retire after it is introduced.

They claim the government's failure to 'phase-in' the changes means women who happen to turn 60 before the set date will receive a state pension worth £1,000 a year less.

Steve Webb, chairman of the Lib Dem manifesto team, is calling on the government to reconsider its position.

"The changes to the pension system in 2010 are actually very welcome," he admitted.

"They do a lot to correct the injustices that many women face from the state pension.

"But the cliff-edge between those who retire on April 5 and April 6 2010 is totally unacceptable.

"It will be quite possible to have two women living next door to each other, both of whom have had identical working and family lives, but one of whom is getting £1,000 every year less from their state pension," he claimed.

"When changes are made to pension systems they are normally phased in.

"Women who turn sixty in the present parliament should get some of the benefit of the new rules, instead of having a sudden cliff-edge in 2010."

Comments

Politics @ Lunch

Friday lunchtime. Your Inbox. It's a date.