Pensions Bill is landmark settlement for the future

The Pensions Bill represents a landmark settlement for future generations, John Hutton, Secretary of State for Work and Pensions said today.

The Bill, published today, would make the state pension more generous by linking the Basic State Pension to earnings; make the system fairer for women and carers; and provide a solid foundation for saving.

John Hutton said: "The Bill we are publishing today would give a guarantee to link the Basic State Pension to earnings, enshrining this commitment in primary legislation. This would mean that the state pension would be worth twice as much in 2050 than it would have been without reform.

"In order to ensure the reforms are affordable and sustainable, we plan to raise the State Pension Age gradually to 68 by 2046. This means that Parliament will be asked to legislate for the next forty years. It is a big step but is absolutely the right way to meet the demographic challenge so that we do not burden our children and grandchildren with the cost of a population spending longer and longer in retirement.

"We are making the system fairer for women and carers. Reducing the number of years needed for a full Basic State Pension, and introducing weekly credits to recognise and reward caring in the same way as working, means that almost half a million extra women over State Pension age in 2025 - aged around 45 to 55 today - would be entitled to a full basic State Pension."

The Bill also allows for the creation of a Delivery Authority to bring on board the expertise needed to design a successful personal accounts system which would provide people with a low-cost simple way to save. Detailed proposals for personal accounts will be published in a White Paper in December.

The Bill includes measures to simplify private pensions to make it easier for people to plan and save.