As the noble Lord is aware, the Government would have discretion to increase by more, but the judgment is that the appropriate requirement this year is that these benefits be changed in line with inflation, or slightly above the movement in prices over the past year. I reiterate that this is not a freeze. It is not part of any benefits freeze; it is purely a function of the fact that these particular benefits rise in line with the change in the price level, as measured by CPI, which is the Government’s official inflation measure. On his particular question, Section 150A of the Social Security Administration Act does not allow for inclusion of these rates in the order, so the rates that will be increased will be taken by alternative powers. There is nothing untoward or underhand in anyway; it is merely a function of how the legislation is framed.
Turning to the new state pension, the noble Lord is absolutely correct: communication is very important. One of the big communication challenges we all face is the perception that if people are not getting what is called the full rate of the new state pension, they are losing out. That is a misperception, and it is important that we try to help correct and overcome that. It is important that we help people understand that the new state pension is a totally new system. The full rate will apply to those who are only in the new system, but for those who have built up state pension under the previous system—the existing system—an allowance will be made for years in which they did not pay full national insurance because they were building up a private pension with some of the rebate for national insurance they received.
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We are now including in state pension statements an estimate of the amount of state pension that somebody would have opted out of or would have been able to build up elsewhere to replace the part of the state pension they contracted out of. It is therefore important that people understand that if you add the contracted-out pension equivalent to the amount that people will be getting from the state, 90% of people will get at least the full rate, if not more. It is a communications challenge, and there has been misunderstanding, but I stress that that is not the yardstick that needs to be used. In fact, the new state pension is much more generous for millions of people in the years up to 2030;
70% of men and 75% of women—that is 3 million men and 3 million women—will be getting more under the new state pension system than they would have got under the old state pension system. In the case of women, up to 2030 they will have an average of £11 a week more under the new state pension than they would have had under the old state pension.