A state pension built to last for the next 100 years

James Purnell today paid tribute to those who campaigned for the first state pension a century ago - and looked forward to the next 100 years of the state pension as a result of vital reform to the system.

Mr Purnell, Secretary of State for Work and Pensions, said changes making the state pension system simpler, fairer for women and carers and more generous by re-linking the Basic State Pension to average earnings, provided a settlement built to last for generations to come.

The reforms come as new DWP research revealed only half of people surveyed thought the state pension would be around when they retire, with 44 per cent sure it won't be.

James Purnell said: "We owe a debt of gratitude to those who fought for the first state pension. Today the challenges are very different from 1908 when just one in four survived to collect the first state pension. In contrast, one in four babies born today will go on to live to 100.

"The impact of this is stark. Current trends suggest the UK will have its first 120 year old in the early 2060s, if not before. That means she is already drawing her state pension and will do so for half her lifetime.

"We have a responsibility to look after today's pensioners whilst also being custodians of the state pension for future generations - and that means putting in place a system that can cope with a rapidly ageing population and high expectations for retirement, whilst remaining affordable. I believe we have struck that balance.

"The state pension is now in good shape for the generations to come and people can be reassured it will continue to form the bedrock of pension provision for another 100 years."

Mr Purnell said that the Government's commitment to restore the earnings link to the Basic State Pension meant that by 2050 it will be worth about double what it is today (in 2008-09 prices). But this also needed to be paid for. Because the proportion of people of working age to pensioners was shrinking, the state pension age would be gradually increased to 68 by 2046 so that future generations were not left to foot the bill for longer life expectancy.

Mr Purnell said increasing food and fuel prices were putting pressure on many of today's pensioners. He emphasised tackling poverty amongst today's pensioners continued to be a top priority for the Government.

He said: "Pensioners especially are feeling the affect of price rises in their heating bills and at the supermarket. We're interested in innovative ways to tackle fuel poverty and to make it easier for older people to claim the benefits they're entitled to and will continue to talk to older people's groups about what more we can do.

"For example, from October, we will be making it simpler and more automatic to claim Pension Credit, Housing Benefit and Council Tax Benefit in one call. Older people will be able to claim the three benefits together, entirely over the phone without having to sign or return any claim forms, which I know they find frustrating.

"We have amended the current Pensions Bill to allow secure data-sharing with energy suppliers to help reduce the bills of older people receiving Pension Credit. And in winter 2008-09 there will be an extra £50 on top of the Winter Fuel Payment for households with someone over 60, and an extra £100 for over-80s households."