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Citizen’s pension is branded ‘derisory’

The Pensions Reform Group, founded by Labour MP Frank Field, has attacked the concept of a 105 a week citizen’s pension as a derisory benefit that will leave pensioners in poverty.

The attack came in the same week that Work and Pensions Secretary Alan Johnson promised to investigate a citizen’s pension in a strategy document called Principles for Reform.

PRG director Ben Forsyth told conference delegates that 105 a week is too low and significantly below the officially recognised poverty line of 120 a week or less than 60 per cent of median household income.

The PRG proposes what it calls the universal protected pension, which would pay between 120 and 145 a week to all pensioners.

Forsyth conceded that paying a pension at this level would entail a 5 per cent increase in employee National Insurance rates and that sufficient funds to pay out the benefit would not be built up for 40 years. In the meantime, a percentage of that amount would be paid.

Liberal Democrat spokesman on pensions and treasury policy Lord Oakeshott said: “A 5 per cent tax increase and 40 year maturity period shows Frank Field still thinks the unthinkable.”

Forsyth said: “A citizen’s pension at 105 a week would be below the level of poverty whereas the UPP would provide an income of between 120 and 145 a week.”

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