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Pension Credit: Finance

Volume 459: debated on Tuesday 1 May 2007

To ask the Chancellor of the Exchequer how the proposed increase in the pension credit guarantee to £130 by 2010 will be financed. (134566)

The figure of £130 is an estimate of the rate of the pension credit guarantee informed by the Treasury’s latest projections for average earnings growth, which are consistent with the assumptions for trend output growth published in chapter B of the 2007 FSBR. The precise rate will be set in the usual way in due course by the annual uprating order, which is subject to affirmative resolution with debates in both Houses. The White Paper, “Security in retirement: towards a new pensions system” (May 2006) set out the Government’s intention to uprate the pension credit guarantee in line with earnings over the long-term and factored this in to the overall projected costs of state pension reform. The Government’s spending commitments will be financed in line with the fiscal rules.