9 October 2008

IRt Hon Rosie Winterton MP

Minister of State for Pensions and the Ageing Society

The National Council on Ageing Conference

The challenges presented by an ageing population

Thursday, 9 October 2008

[Check against delivery]

Good afternoon Ladies and Gentlemen.  I’m delighted to be here.  As Minister for Pensions, I am now three and a half days old.  In my former role as Minister of Health, I took through legislation on the Mental Capacity Bill.  This work is still not as recognised as it ought to be, and I am committed to making sure that policy is developed and personalised to meet peoples aspirations for their later years.  We don’t want to make assumptions about what 12 million people want in retirement. 

This is my first speech and my chance to engage with so many groups and representatives from around the country.  It is important that this work is not London centric, and recognises geographic needs.

I have some big shoes to fill in this role following Mike O’Brien.  Mike did some excellent work setting up Older People’s Day.  Last week, on Wednesday we celebrated our second annual UK Older People’s Day.  There were over 900 local events involving about 50,000 people.  These events included everything from information events and health check ups to tea dances, education days and even belly dancing! 

Together, these events helped to promote the wide variety of lifestyle that older people these days have and frankly expect.  Thank you to all in this room who helped to make it a successful day.  As Pensions Minister and Older People’s Champion, we want society to regard life as an older person as a successful time of life, and we are looking to shape that view.

The Prime minister also held a reception at number 10 and praised the contribution older people make to society as "massively important to the success of the nation”. 

Older People’s Day was a terrific celebration of longer living.  At the same time, longer living presents society with new challenges and opportunities.

My private secretary’s niece, Hannah, was born around the same time as I became Minister.

Our latest projections indicate that out of the four babies born on Hannah’s ward, one of them will live to be 100 years old.   All of them can expect to spend around a quarter of their lives in retirement. And all of them have entered a world where, by 2050, over half of the UK’s population will be over 50 years old. 

Where in 1900, Hannah’s life expectancy would have been only 56, it is now 92…. Nearly double.  And set to rise again.

We need to keep repeating these facts.  Like me, I’m sure there are many people in this room grateful for the increased life expectancy rates since 1900! It is fantastic that people are living longer.  Living longer, healthier, and more active lives is one of the greatest achievements of the 21st century. 

Longer life spans, lower fertility rates and an increasing number of pensioners are fundamentally changing the structure of our society.  And as a society we must adapt.  It’s a challenge that cuts across policy makers, employers, pensions providers and individuals.

We look at major challenges to the world.  Climate change, international security and financial stability.  Frankly, demographic change sits alongside these.

Longer living has led to changes in peoples aspirations for their retirement.  Our expectations are different to those of our grandparents.  And 70 years from now, when Hannah retires, her expectations will have changed further.  The anticipation of changing aspirations is hugely important in this debate.

We do need to address the challenges of an ageing society.  And one of the effects, will be affordability.

So what are we, the Government, doing about this?

• We will make the State Pension simpler, more generous and widely available to address the historic inequalities in entitlement.
• As a result, three quarters of women reaching state pension age in 2010 will be entitled to a full basic state pension – compared with around a third now.  
• We will restore the earnings link to the Basic State Pension.  That means the Basic State Pension will be worth more than twice as much in 2050 as it would be otherwise.
• We will increase the State Pension Age - incrementally over the next 40 years. Reflecting our ever increasing longevity and ensuring the system is sustainable over the long term.
• And from 2012 people will be automatically enrolled into a pension scheme through their employer. With a guaranteed minimum employer contribution and the creation of personal accounts, we’re allowing all employees to take responsibility for meeting their own retirement aspirations. This will bring millions of workers into saving – many for the first time.  This is incredibly important in terms of ensuring the security for older people we all want to see.

Of course, that’s in the future.

Today, since 1997, we’ve introduced a range of measures to directly tackle a legacy of pensioner poverty. Pension Credit, above-inflation increases in the basic State Pension - around 7% in real terms- , Winter Fuel Payments, and free television licences for those aged 75 and over, mean we’ve now lifted around 900,000 pensioners out of relative poverty.

And we’re aware too that our current economic climate brings with it exceptional pressures for those on fixed incomes – like pensioners. Which is why this winter there will be an extra £50 on top of the normal Winter Fuel Payment paid to households with anyone of 60 and over and an extra £100 for households with 80 pluses.

And that is why this September the Chancellor announced a new £1 billion package which will enable households to take advantage of energy efficiency measures that could save them over £300 on their fuel bills. Not just this year but every year.  I want to reassure you that I will be working closely with Mike O’Brien as the new Minister for Energy, to look after vulnerable pensioners.

There are other areas we need to look at such as healthcare.  And we will have great focus from the Department of Health on this issue.  Around 1 in 6 of our over 80s suffer from dementia.  This is another figure, set to increase, as we have more people living well into their 80s. 

There are increasing numbers of people who need care but also who’s carers need help.  We also have a growing number of single persons.  Where children have cared for their ailing parents into old age, we now need to plan to cater for elderly families, from different generations.

And what of those with no families?  Those who are alone?  A fundamental challenge is loneliness in our old age. 

We know Hannah is surrounded by toys, balloons, family and friends.  Our older people deserve to leave this world in a similar fashion to that in which they arrived.  3.8million of our pensioners now live alone. 

When I lived in a Southwark estate many years ago, there were pensioners bungalows, but they were up at the top of a block of flats.  It was incredibly isolated.  I used to wonder how they got to the shops, and did they want to live in this island in the sky?  I suspect not. 

We need to look at how we might change their environment.  We have to make sure we don’t get a block of people who only live together.  We have to look at different alternatives.  It is about listening to what people want and matching that to their needs.  I want to open this debate up and consult with everyone.  We need views from all over the country, not just those of pensioner age, but those that are younger, and what do they expect when they get to retirement.

Doris Lessing won the 2007 Noble Prize for literature, aged 88.  Trevor Baylis invented the wind up radio, transforming the lives of millions across Africa, aged 72.  Bruce Forsythe turned 80 in February and still presents ‘Strictly Come Dancing’. 

That’s where we want to be in terms of this debate.  We have a good framework that many of you have contributed to and we need to use this to move the debate forward so that when Hannah does reach 60, 80 and 100 she has all she needs and wants available to her.

Thank you for welcoming me today.  I look forward to settling into my new role.  I look forward to exploring the problems and possible solutions for an ageing society with you this afternoon.  And I look forward to working with you in the future.