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Pensions Bill 2013-14
Type of Bill:
Following a consultation in 2011, the Bill was announced in the Queen's speech of 9 May 2012. A written ministerial statement of 12 July 2012 announced that a white paper would be delayed until autumn 2012 and the Bill would not be introduced to Parliament until the 2013-14 Parliamentary Session.
The Bill, as originally planned, aims to establish a new, single tier state pension of around £140 a week and bring forward the increase in the state pension age to 67.
It would allow for:
- the current, complex state pension system to be replaced by a new single tier pension, set above the level of the basic pension credit means test. This is expected to be set at around £140 per week
- the increase in the state pension age to be brought forward, with the age of eligibility increasing to 67 between 2026 and 2028
- the state pension age to rise in the future to account for increases in longevity
However, on 18 September 2012, it was reported that the government's state pension policy was being redrawn following concerns from David Cameron that the £140 pension may alienate the crucial 'grey' vote. The results of the rethink will be revealed when the white paper is published.
The previous, Labour government's timetable planned for the state pension age to rise to 67 between 2034 and 2036, but this plan will be amended by the Bill. The coalition government has already made changes to the timetable to account for the rising cost of caring for an ageing population - the Pensions Act 2011 allowed for the age to increase to 66 between 2018 and 2020.
The National Association of Pension Funds said the creation of a single tier pension would be "the much-needed foundation on which people can build their own savings, knowing that it pays to save" and would "help ensure that auto-enrolment is a success".
The National Union of Teachers said the state pension age increase was an "unacceptable move", but the Institute of Directors said the current system is "outdated and unsuited to the realities of modern demographics".
In response to the government's plans to raise the state pension age to 68 by 2046, the PCS, Unite and NUT unions launched the 68 is too late campaign.
Should the Bill become an Act, it will only extend to England, Scotland and Wales.
During the Bill's second reading in the House of Commons, shadow work and pensions secretary, Liam Byrne had welcomed a flat-rate pension but questioned the virtue of reviewing the state pension age every five years.
Work and pensions secretary, Iain Duncan Smith said during the debate that changes to the pension system were "long overdue", and would implement " reforms to modernise bereavement benefits; bring forward the increase in the state pension age to 67; and put in place a mechanism for a regular review of the state pension age".
The Pensions Bill completed its committee stage in the House of Commons on 11 July 2013. Line-by-line examination of the Bill took place over six days and followed two public evidence sessions involving the Pensions Regulator, the Confederation of British Industry and the Association of British Insurers amongst others.
Five government amendments were made and accepted during the committee stage with clauses 27 and 36 receiving minor changes, with a new schedule introduced to provide for a compensation cap to the pension protection fund.
A whole raft of amendments were introduced by the government at report stage of the Pensions Bill on October 29 as the Bill successfully passed from the Commons, to the House of Lords.
All government amendments relating to Part 4 of the Bill and private pensions were successfully passed while a new clause from Labour calling for a review into state pensions in relation to women within 15 years of state pension age was rejected by the government.
On 30 October 2013, the Bill was read a first time in the Lords and ordered to be printed. The second reading of the Bill was on 3 December. After a short debate, the Bill was read for the second time and passed to a Grand Committee.