Social Security

I cannot announce an increase in the winter fuel allowance. When the allowance was introduced, it was at a much lower level, and, as the hon. Gentleman said, people find it helpful. As a result of changes since 1997, we will spend some £10 billion extra on pensioners in 2006–07, almost half of which will go to the least well-off third of pensioners. If we had merely increased the basic state pension in line with earnings, the least well-off third of pensioners would be on average £30 a week worse off. Today, we are in an almost unprecedented position in which pensioners are no more likely to be poor than any other group in society. We have succeeded in breaking the historic link between being old and being poor, an achievement that I hope that hon. Members on both sides of the House will celebrate. We have made other important changes to pensions policy since 1997. We have set a framework within which there are personal pension products that are economic for people on low and medium incomes. We have improved the coverage of the state second pension, which includes carers for the first time and, through the Pension Protection Fund, we have provided protection for occupational defined benefit schemes. We must build on the progress so far and meet two significant challenges around pensioner incomes. First, demographic changes mean that by 2050 there will be two people of working age for every pensioner compared with 10 people for every pensioner 100 years ago. The current figure is about four. Secondly, we need to address the extent of under-saving. The Pensions Commission has calculated that nearly 10 million people are not saving enough for their retirement.