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I wanted to come today to talk about how we help older people, how we make sure we have a strong pension system, and how we address the concerns that you have. And let me start by thanking for all the brilliant work that you do. It really is a fabulous organisation. We all see that in our own constituencies.

I often talk about the long term economic plan that we have to turn the country around, and I鈥檇 argue that with unemployment coming down, with the economy growing, with the deficit being reduced, that that plan is working. But people often say to me, 鈥淲ell that all sounds very well but what does this long term economic plan mean for me and for my family?鈥� And what I鈥檓 trying to do now is explain how this plan converts into a plan for you and your security and your future stability.

Pensions security

And today is a big day for pensions in the UK, because we鈥檙e making some important announcements and changes. There鈥檚 an announcement about what will happen to the basic state pension next year and how much it will go up by. And there鈥檚 an announcement, because we鈥檝e announced our Pensions鈥� Bill today, about the extra freedoms we鈥檙e going to give people to tap into their savings and their pension as they grow older. And I want to talk about both those things, but I think too often we politicians, we talk about technical issues and technical facts and figures rather than the values and the thinking that lie behind them. And to me there are some very simple values we should be thinking about when we鈥檙e talking about how we want to see pensioners treated in our country.

And I think the first one is security. Security and stability. If you鈥檝e worked all your life you need to have a really predictable situation as you get older because you can鈥檛 suddenly dive back into the work force or earn lots of extra money to help pay for some extra thing the government has laid on you. So this security and stability is really important. And that鈥檚 why we introduced the triple lock for the basic state pension. We said that the pension will always go up by either prices or earnings or 2.5%, whichever is the higher.

Now, today the inflation figure has come out, and it鈥檚 a good and low inflation figure, which we鈥檙e all pleased about. So it鈥檚 almost at 1.2% meaning the pension next year will go up by at least 2.5%. That is an increase of 拢150 in the basic state pension, almost 拢3 a week, twice the rate of inflation. That means that since I鈥檝e been Prime Minister we would have seen the basic state pension go up by 拢950. It will have gone up by a good 拢440 more than if we鈥檇 just up rated it by earnings. And I think that is a good and fair way to arrange our pensions so that people have security and stability about the future.

I would say, because it was at a meeting like this that I made the promise, we also made a series of promises at the last election that we said during this parliament we would keep the Winter Fuel Payments, the free television license, the bus pass, the pensioner benefits, and we鈥檝e kept all those benefits in full, and I鈥檓 glad that we kept that promise. So we are balancing the budget, we鈥檙e dealing with the deficit, but we鈥檙e not doing it on the back of British pensioners.

Flexibility

The second key value is responsibility. I think if you鈥檝e worked hard and saved during your life you deserve responsibility in retirement about how you spend the money that you鈥檝e worked so hard for and saved so hard for. And that鈥檚 why we鈥檝e made a series of announcements this year, first of all saying you no longer need to buy an annuity. It鈥檚 your money; you should be able to spend it as you choose. We also made the announcement that if you want to you can pass on your pension pot tax free to your children, instead of having to pay 55% tax on it. And today, in the pension reform Bill that we鈥檙e publishing, we鈥檙e explaining that as well as the current practice of taking a lump sum and then having a drawdown income, we鈥檙e saying you could take out a series of lump sums, rather than having to do it in one go. It is additional flexibility; additional responsibility. And I think that鈥檚 right. I think it鈥檚 right to say to people who鈥檝e worked hard and saved hard that it鈥檚 your money, you can choose to do with it as you wish.

Very important that we provide guidance and that you鈥檙e able to access good advice, and we鈥檙e making announcements about that today, because these things are complicated. That鈥檚 why I brought my experts with me, Steve Webb and Iain Duncan Smith and Ros Altmann鈥檚 here. But I think advice and guidance is very important.

New 鈥榮ingle tier鈥� State Pension

The third value alongside security and responsibility is dignity. I think people who鈥檝e worked hard, who鈥檝e done the right thing, who鈥檝e saved do deserve dignity, not having to sign up for extra benefits; they should get them as of right. And that鈥檚 why I think one of the biggest reforms that we鈥檙e making, that I鈥檓 really proud of, is what was called the Single Tier Pension, and what is going to be called the new State Pension, which basically means that when future generations retire, that instead of getting the 拢113 a week, soon to go up to 拢115, plus the pension credit, you鈥檒l get a single tier pension which will be north of 拢148 in one go.

Why I think this is so powerful is that it means we can say to everyone in our country that every penny you save in your working life won鈥檛 count against you in retirement; you鈥檒l be able to spend it on your own retirement, in your own way. So I think the single tier pension is going to bring enormous amounts of dignity and security to future generations. I wish we could do it for all pensioners now. A lot of pensioners stop me in the streets; they say all sorts of things to me, but they often say to me, 鈥榃hy can鈥檛 we have this straight away?鈥� Well, of course, there are some costs associated with the new single tier pension; some people are paying higher national insurance contributions to make it possible in the future, so it has to happen in the future. But I think it鈥檚 a big reform.

So my message is yes, there are lots of things we still need to sort out. We need to make sure the social care system is working properly for older people. We need to make sure our health service performs the very best care that it can for older people. But on some of the key issues about stability and security, responsibility and dignity for older people, I think we really are delivering some changes that I hope you鈥檒l welcome today.

And, again, thank you very much for listening.