The coalition government remains committed to introducing a better, simple, single state pension and tying in the pension age to increases in longevity, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg said today.
In a mid-term review detailing the government's progress since the coalition came to power in 2010 and its priorities between now and 2015, Cameron and Clegg said ensuring the pensions system is fair and affordable and provides dignity for people is a priority for government.
'That means working towards a better, simple, single state pension, protecting pensioners against erosions in the value of their pensions and introduce a new system which will encourage young people to put aside enough money for their old age,' they explained in The coalition: together in the national interest.
Specifically, the document repeats the commitment made in last year’s Budget to automatically increase the state pension age in line with future changes in life expectancy, something Cameron and Clegg said would keep the state pension system 'sustainable and affordable'.
Details of the reform plans, expected to involve a single state pension set at around £140 a week, were expected to be published last summer. An initial delay meant the plans were then expected to be published in the autumn, but in today's document Cameron and Clegg indicate an announcement on the reforms would be made 'in due course'.
The mid-term review also repeated the commitment made in last month’s Autumn Statement to increase the limit on drawdown pensions from 100% to 120% and to take forward legislation to put public sector pensions on a 'fair and affordable' footing.
Government will also continue to roll out pensions auto-enrolment; ensuring businesses with fewer than 50 employees are not required to begin auto-enrolling employees until 2015.
In a move aimed at providing 'dignity in old age', the review outlines the government's support for a cap on adult social care costs. The cap was one of the main recommendations of the Commission on Funding of Care and Support, chaired by economist Andrew Dilnot, which reported in July 2011.
Dilnot recommended that no-one should be required to spend more than £35,000 of their personal assets on care in their old age but, while today's document did not specify a cap figure, it is expected it will be set higher.
Former care services minister Paul Burstow last week urged government to set the cap at £50,000-60,000 in 2015 prices.
