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Purnell snubs claims that women lose out on NPSS

Pensions Minister James Purnell has rejected widespread concerns that women and carers will lose out under the proposed NPSS reforms, arguing that the pensions White Paper represents the biggest move to sexual equality in pensions since Barbara Castle’s 1978 reforms.

Speaking at a pensions debate in Westminister last week, Baroness Hollis of Heigham said the NPSS reforms are male-oriented and argued that, under them, many women will not be eligible for the basic state pension.

She said many will fall into the means-testing trap and it will not be worth them saving in the NPSS.

She said the problem is set to continue as there will be a 50 per cent increase in the number of hours needed for caring over the next 20 years and the majority of this will be provided by women.

Independent pensions adv-iser Ros Altmann said the White Paper proposals “make women jump through hoops” and reiterated her calls for a universal, flat-rate basic citizen’s pension.

But Purnell dismissed the idea of a citizen’s pension. He said basing the state pension on residency rather than solely on National Insurance contributions and reducing the number of years of NI contributions would dramat- ically widen state pension coverage to 90 per cent by 2025.

He argued that the NPSS reforms represent the most significant step towards sexual equality in pensions since former Labour minister Barbara Castle’s 1978 pension reforms.

The Department for Work and Pensions says the new carer’s credit, for example, will mean around 70,000 extra carers caring for 20 hours or more a week because of increased longevity, over half of them women, could qualify for the basic state pension.

But Purnell said 100 per cent coverage through a universal state pension conflicts with the essential principals of contribution.

He said: “I question whether 100 per cent coverage would be acceptable to the public. We are worried this could stop people from taking part-time jobs. It goes against the principle of getting back what you contribute.”

But Altmann said: “The current reforms perpetuate the idea that the role of women is worth less than men’s and they are making women jump thr-ough hoops. The contributory principal is a myth. National insurance is a tax.

“We need a decent underpin so people know what they are going to get and if they want more they will have to contribute more.”

But Purnell said: “A social underpin will not get rid of inequality in the labour market. The additional pension will depend on whether you work or not. It is not a question of getting rid of inequality, it’s which model makes the most difference most quickly.”

Standard Life marketing technical director Andy Tully says: “The current state pensions system clearly does not cater for women. We need to properly recognise unpaid caring work and the Government has the opportunity to make the necessary changes to state pensions and means testing in the forthcoming Pensions Bill.”

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