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Brown in move to boost minimum income guarantee

Pensioners were given an income boost, with the Chancellor unveiling plans to raise the minimum income guarantee to £100 a week by 2003.

The move, proposed in the pre-Budget statement, will see the MIG rise to £92.15 a week by 2001 and to £100 by 2003, from which point it will be linked to earnings.

Other proposals to appease pensioners angered by last year&#39s 75p rise in the basic state pension include increasing the basic state benefit for single pensioners by £5 a week from April next year and couples&#39 benefits by £8 a week.

But Gordon Brown refused to bow to pressure to link the basic state pension to earnings.

The Chancellor also unveiled plans for pension credit top-up payments to encourage modest earners to save and not rely on the MIG to provide income in retirement. The credits will be available to pensioner couples with an income below £200 a week and all single pensioners with an income below £135 a week from 2003.

But IFAs are concerned the moves could baffle those pensioners they are designed to help.

Wentworth Rose managing director Philip Rose says: “The fact that many in the pension industry are still struggling to understand the implications of the MIG and the new pensions credit on financial planning does not bode well for the person on the street who needs to decide whether it is worth them saving or buying a stakeholder.”


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