Minister urges rethink on pension benefits

THE WHOLE range of state benefits for the over 60s, including the retirement pension, should be re-examined to ensure it reflects changes in social needs since the inception of the welfare state, a social security minister urged yesterday.

Government plans for legislation to equalise pension ages should mark the start of a national debate about how needs should be met for future generations of elderly people, Ann Widdecombe, the Under- Secretary of State for Social Security, said.

In an interview with the Independent, Miss Widdecombe said: 'We have to go much further than simply talk about retirement age, look at the demographic changes and ask ourselves 'do we want to carry on as we are?' '

State retirement pensions, which cost the country pounds 26bn a year, were introduced when a minority of people also had occupational pensions. By contrast, occupational pensions were now commonplace, worth an average of pounds 54 a week. 'The state pension is now not playing the same role as it once did in all pensioners' lives. Some have to live on it - and for others it is just a fraction of their total income.'

Asked whether she was advocating cutting or limiting state pensions to the neediest, she said: 'I think we are a million light years away from means-testing the state retirement pension. But we do need to take a long wide view at the current provision.'

Around 69 per cent of pensioners retiring now do have an occupational pension, amounting to the value of the state pension, on average.

Last year, the Government set out four possible options for equalising state pension ages - currently 60 for women and 65 for men - in a consultation paper. The Government's chief social security advisers last month came out in favour of requiring both sexes to work until they are 65. The independent social security advisory committee said the switch should be phased in over 15 years, beginning in 2000 to cushion the impact on working women.

The consultation paper has attracted some 4,000 responses from individuals and organisations, but no consensus, Ms Widdecombe disclosed.

'Very few have been in favour of equalising pension age at 63. So many of the responses have focused on just one aspect of the issue, one point in time. We need to have an overall look at provision.'