How do we ensure fairness for families?

Hard working families have been the big winners from ten years of growing employment, low inflation and low interest rates. Looking forward, both our society and our economy are changing rapidly and we have to make sure we are providing the best financial support for families with children and the real rights that working parents need.

We have done a great deal to help increase family incomes. We are increasing Child Benefit so that it reaches over £1,000 a year by 2010.

For six million families on both child benefit and child tax credit - that is the vast majority of families - the minimum payment which was just £11 in 1997 will rise to £31, a rise from £575 a year to £1,600 a year.

As well as doubling the amount and period of maternity pay, and tripling the length of maternity leave, we have given parents of young children the right to request flexible working.

Points to Consider

• How should we help more families to build up assets for their children?
• What more should we do to lift families from poverty?
• How can we enable more families to balance their work and family commitments successfully?

How do we ensure a dignified and secure retirement for all?

Over the last ten years pensioners have done well out of our growing economy. By combining real increases in the basic state pension with special help for the poorest pensioners, the last seven years have seen pensioners’ average net incomes rise by 25 per cent – that is ten percentage points more than the rise in earnings – to around £1,500 better off a year. At the same time, we have lifted over two million of the poorest pensioners out of absolute poverty and a million out of relative poverty.

We need to make the pension system fairer, simpler and affordable for the long term. We are changing the basic state pension so that when women and men are bringing up children or caring for relatives, that contribution gets recognition in the pensions system. Almost half a million extra women currently aged between 45 and 55 will retire with a full basic state pension. We are making saving for a pension easier by giving every employee the right to a workplace pension with a contribution from their employer.

To tackle problems of saving inertia, employees will be automatically enrolled into the new low cost personal accounts scheme. We will re-link the basic state pension to average earnings. Our objective, subject to affordability and the fiscal position, is to do this in 2012 but, in any event, by the end of the next Parliament at the latest. In the long term, for this major increase in the basic state pension to be affordable we must gradually increase the state pension age by one year in each decade beginning in 2024, reaching 68 in the 2040s.

Points to consider

• What more can we do to make sure that elderly people receive all the entitlements and services they are owed?
• What more can we do to encourage young people to start saving for their pension earlier in life?