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Last Updated: Tuesday, 7 September, 2004, 19:13 GMT 20:13 UK
Lib Dems promise pensions boost
Women will particularly benefit, say the Lib Dems
People aged over 75 would get their state pension boosted by 25 a week under a Liberal Democrat government says party leader Charles Kennedy.

The "Citizen's Pension" will restore the link between pensions and earnings for over-75s, who the party says are the most vulnerable pensioners.

Measures such as abolishing the Department of Trade and Industry would help meet the cost, Mr Kennedy claimed.

But the plans were branded "half-baked" by Labour.

Under the Lib Dems single pensioners aged over 75 would receive 105.45 a week and pensioner couples would get an extra 33.70, boosting their weekly pension to 160.95.

Mr Kennedy said his plan would take a million pensioners out of means testing.

"All the indices show the poorest pensioners are also the oldest pensioners," he said.

Women bonus

A government-commissioned review on pension plans is due out next month.

It is partly looking at the vexed question of whether people ought to be compelled to invest in non-state pension schemes.

On Monday Work and Pensions Secretary Andrew Smith quit the government after weeks of speculation he might be replaced in the next cabinet reshuffle - although he insisted he wanted to spend more time with his family.

The Tories, who have called a Commons debate on pensions for Wednesday, have already pledged to restore the pensions link to earnings.

Under the Lib Dems' plans, single pensioners over 75 would have an extra 25 a week and couples 33.70.

The party believes women who have stayed at home to care for children or would otherwise rely on their husband's pension should no longer be penalised under the plans.

The pension would be based on residency, not on people's history of national insurance contributions.

And it believes that by boosting the pensions income, it will reduce means testing for benefits.

Among other plans expected to be unveiled are:

  • Making occupational pension schemes "opt out" rather than "opt in" so workers have to make a conscious decision not to join the scheme

  • A kitemark system so employees can check how their company's pension scheme rates

  • Scrapping the need for people to buy annuities in money purchase pension schemes to unlock their savings when they reach 75-years-old.

The party says plans to replace the council tax would also benefit pensioners. The package would first be available to over-75s, who the Lib Dems argue face extra costs with heating and possibly transport.

But there are suggestions it could later be rolled out to other age groups if funding allows.

'Grey' vote battle

Labour says older pensioners do tend to be poorer but 60% of the extra money from raising the basic pension will go to the better-off, not those who need it most.

Pensions Minister Malcolm Wicks said: "This is yet another half-baked policy from the Liberal Democrats.

"Their sums don't add up, and the talk of abolishing government departments to fund the proposals only shows these plans haven't been seriously considered or fully costed."

The government's Pensions Bill is going through Parliament, offering a pensions protection fund for employees whose schemes go bust. Critics say the plans are not radical enough.

Wider questions about the pensions, including state payments, are due to be tackled by Adair Turner's review of policy for the government. His interim findings are due next month.

All the political parties see the "grey" vote as particularly important, with older people thought more likely to turn out at the general election expected next year.

Liberal Democrat Leader Charles Kennedy
"We're looking at a flexible decade of retirement"

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