Social Development Committee's response to the DWP Green Paper

Room 242
Parliament Buildings
BELFAST
BT4 3XX

Email: john.simmons@niassembly.gov.uk

Tel: 028 9052 1787
Fax: 028 9052 1667

27 June 2011

Our Ref: CSD/022/2011/CMcC

Mr Sam Dempster
Social Security Policy and Legislation Division
Level 1, James House
Department for Social Development
Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast BT7 2JA

Dear Sam,

DWP Green Paper: “A State Pension for the 21 st Century”

At its meeting of 23 June 2011, the Committee for Social Development considered the consultation paper from the Department for Work and Pensions entitled: A State Pension for the 21 st Century. The Committee agreed its response to the consultation as reflected below.

The Committee expressed concern that the Coalition Government’s proposals for future pension reform as set out in the Green Paper were predicated on the individual’s personality responsibility to save and a universal life expectancy rate across the UK.

The Committee highlighted the case of the working poor in society who are not in a position to save for retirement and those with health problems resulting in shortened working lives. The Committee also stressed that life expectancy varies across geographical regions within the UK and is significantly influenced by socio-economic factors.

The Committee recognised that these proposals would not benefit all pensioners and that some may lose out as a result of the proposed reforms. With a cost of living and an unemployment rate which is higher than the UK average, there was a general concern about the impact of these reforms on pensioners in Northern Ireland.

In respect of the two options for Reforming the State Pension, some Members of the Committee expressed the view that Option 2 did appear to be more advantageous to future pensioners.

Some Members of the Committee expressed concerns that under Option 1 people may not have absolute clarity as to the amount of state pension they would receive when they retire. Some Members were concerned that this Option would not provide people with sufficient time to plan for their retirement.

The Committee welcomed the fact that Option 2 for reforming the state pension would deliver improved pensions for women, low-paid workers and the self-employed.

With regards to the two options for developing a State Pension age mechanism, some Members of the Committee expressed concern that under Option 1, any increases in life expectancy would automatically adjust the State Pension age.

In that respect, some Members of the Committee considered that Option 2, which foresees increasing the State Pension age through a review at pre-determined intervals, was a better option as it provided greater certainty to people.

Finally, some Members expressed the hope that any administrative savings which may arise as a result of these proposed reforms to simplify the future pension system would be passed on to future pensioners (in their State Pension).

Yours sincerely

John Simmons
Clerk, Committee for Social Development