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Purnell rejects PPI’s means-testing claim

The Pensions Policy Institute’s projections for higher levels of means-testing will only come true if the White Paper fails and private savings collapse, says pensions reform minister James Purnell.

Speaking at the launch of the PPI’s evaluation of the White Paper, the MP for Stalybridge and Hyde said the institute’s suggestion that up to two-thirds of pensioners could fall into means-testing will only happen if Government reforms are unsuccessful.

Purnell said he will give the PPI further access to DWP figures to allow closer scrutiny and provide links to the PPI research on the DWP website to widen the public debate.

He said changes to the savings credit will ensure that the majority of people eligible for means-testing will still have an incentive to save and the DWP will produce evidence over the summer to refute suggestions from the LibDems that means-testing would wipe out the benefit of employer contributions.

Purnell said the PPI’s research is based on assumptions the Government would find unacceptable, such as lowering payments to couples, which he says will affect two-thirds of pensioners.

He said: “We are not expecting all stakeholders to sign up to the whole of the White Paper, there are trade-offs. The PPI’s pension credit scenario is one where the White Paper fails and we think it implies a collapse in private saving.”

Tory Shadow Work and Pensions Secretary Philip Hammond called on the Government Actuary’s Department to carry out a peer review of the White Paper assumptions.

Hammond said that the Government needed to focus more on the public perception of the proposals and how they will be portrayed in The Sun, Daily Mail and Daily Mirror, as this will be the key challenge to ensuring that personal accounts are successful.


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