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Pensions Bill [HL] 2010-11
(This Bill is from a previous session)
Bill is now an Act
Type of Bill:
The Bill was announced in the Queen's Speech on 25 May 2010, and was introduced to Parliament on 12 January 2011. It will apply to England, Scotland and Wales.
It aims to restore the earnings link to the State Pension, as well as ensure the affordability of the scheme by reviewing the planned increase in the age of eligibility.
The Bill, as first introduced, allowed for:
- the State Pension age for women to rise to 65 by November 2018
- the State Pension age for men and women to rise to 66 between December 2018 and April 2020. The date by which this increase will be completed has now been set back until October 2020. A further rise to 68 is already scheduled to occur by 2046
- the State Pension to rise each year either in line with earnings, prices, or by 2.5% - whichever figure is highest
- the maximum savings credit award in pension credit to be frozen for four years
- default retirement ages to be phased out
- rules that require compulsory annuitisation at 75 to be scrapped
- hanges to the earnings thresholds at which employees are automatically enrolled into workplace pensions
- a reduction in the annual and lifetime allowances for tax-privileged pension saving
All three main parties pledged to restore the earnings link to the State Pension before the 2010 election. The Bill's main measures are taken from the Liberal Democrat manifesto.
Age UK and International Longevity Centre-UK have welcomed the phasing out of default retirement ages. KPMG, the Association of Consulting Actuaries and the National Association for Pension Funds have all welcomed the fact that pensions will remain tax-incentivised after the Bill's introduction. The British Chambers of Commerce is less happy with the Bill, and GMB has said that the legislation should do more to increase the State Pension.