Billions offered to solve pensions error

Millions of Britain's elderly facing a cut in their state pensions next year were last night thrown a lifeline after the Government offered to spend billions correcting the "error".

Millions of Britain's elderly facing a cut in their state pensions next year were last night thrown a lifeline after the Government offered to spend billions correcting the "error".

In the House Lords last night Social Security minister Baroness Hollis of Heigham offered a concession over widows and widowers' pension entitlements - avoiding a possible defeat of the Welfare Reform and Pensions Bill.

Under legislation passed in 1986, entitlement to a dead spouse's pension was to be cut by half from April 2000, a measure which will affect around 1.6 million pensioners. Critics say people enquiring about their entitlement were mislead.

Lady Hollis accepted an amendment proposed by crossbencher Lord Rix to allow the Government either to defer the introduction of the new rules or compensate those who had been wrongly advised. She acknowledged that ministers had inherited a multi-billion pound "mess" which had to be sorted out.

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