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Retirement Pensioners (Earnings Rule)

Volume 721: debated on Monday 22 November 1965

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asked the Minister of Pensions and National Insurance if she will abolish the earnings rule for old-age pensioners, in the light of the proposals of the National Plan for the augmentation of the working population.


asked the Minister of Pensions and National Insurance what changes she proposes to make in the National Insurance pension arrangements, in view of the statement in the National Plan that there are some old people who might be willing to enter or remain in the working population in certain circumstances.

The National Plan indicates the need to make more use of the services of older people who would welcome the opportunity of employment. National insurance pension arrangements taken as a whole already facilitate this, and I do not think that the abolition of the earnings rule would help.

Is not my right hon. Friend aware that there are many people who are retired and would like to carry on working but who are prevented from doing so because of the present earnings rule? My right hon. Friend the First Secretary cannot have it both ways. If we are to increase the working population by 200,000, made up of married women and retired persons, the earnings rule will have to go. Will my right hon. Friend look at this again, please?

Perhaps if I give my hon. Friend the following figures they might put this matter in perspective. At present 386,000 men between 65 and 70 are working. That is 40 per cent. of the total field, and of these, 240,000, that is, the great majority, are working full time and not taking their pensions. Another figure that might help is that a man on part-time work can earn up to £5 net and still draw his full pension. Indeed, in 1953 the Ministry carried out an inquiry among a great many men who had retired at 65 and they had the specific question put to them: if they had been able to continue to work and get their pension, how many would have continued to do so? The figures at that time showed that only 12 in every 1,000 would have done so.

Would not the right hon. Lady agree that the National Plan shows that the activity rates among older people are declining? Would not she agree that if they are to make their contribution to the economy, and indeed if they are to be happy in themselves, it is essential that she look at the earnings rule again and find some acceptable and not too expensive way of getting rid of it?

I am always willing to look at the earnings rule, and I have said on previous occasions that we keep this under constant review. Perhaps one way of getting over some of the problems is to raise the amount which a man may be able to earn before he is affected by the earnings rule, and that is what I am continually keeping under review.