Means testing undermining personal accounts

5.09.00pm UTC (GMT +0000) Wed 7th Nov 2007

Commenting on the Pensions Bill proposed in today's Queen's Speech, Liberal Democrat Shadow Work and Pensions Secretary, Danny Alexander MP said:

"This Government's attempts to increase incentives to save for retirement are totally undermined by its damaging obsession with means-testing.

"Many people on low to middle incomes will think twice about setting aside money for old age when Labour's massive increases in means-testing means that they would simply be saving money for the Government rather than themselves.

"While the Conservatives are right to agree with us on this point, it's a shame that they haven't bothered to propose a workable solution. Hot air alone will not solve this problem.

"The Liberal Democrats would immediately restore the link between pensions and earnings and introduce a citizen's pension within 10 years that would slash means-testing from over 50% of pensioners to less than 10%, dramatically boosting incentives to save."