Mr Major’s Parliamentary Answer on Pensioners (Income) – 6 April 1989

Below is the text of Mr Major’s response on Pensioners (Income) , made on 6th April 1989 in the House of Commons.

Sir Trevor Skeet To ask the Chancellor of the Exchequer what has been the change in the post-tax income of pensioners since 1979.

Mr. Major The average post-tax incomes of pensioners increased by 23 per cent. in real terms between 1979 and 1986.

Sir Trevor Skeet I welcome those figures and the fact that the Chancellor raised income support substantially in the Budget for the over-75s, but will my right hon. Friend bear in mind the plight of pensioners who are on only the single state pension and have no savings?

Mr. Major I understand my hon. Friend’s concern. These days it is misleading to assume that most pensioners rely solely on the state retirement pension. At present about 50 per cent. of all pensioners also have an occupational pension and that proportion rises to about 70 per cent. of those who retired in the past five years. Those who do not have an occupational pension could either receive an earnings-related supplement to their state pension or be entitled to income support and housing benefit additions.

Mr. Shore How much of the increase about which the Chief Secretary told us was due to reductions in income tax and how much was due to the secular increase in occupational pensions that has been taking place year after year?

Mr. Major To give the right hon. Gentleman the precise figure I shall need to write to him.

Mr. Charles Wardle Have not people who retired before the introduction of the state earnings-related pension scheme in 1978, without an occupational pension of their own, fared less well than the average? Therefore, will my right hon. Friend consider including in his welcome changes to the higher level of age allowance people of 70 and over to cater for all women who retired at 60 prior to 1978?

Mr. Major The principal problem that my hon. Friend outlines has been dealt with in the package for poorer pensioners that my right hon. Friend the Chancellor announced some months ago. It comes into effect from October this year and will provide an extra £2.50 for single pensioners who qualify and £3.50 for couples.