state pension

A State Pension of £140 a week?

A new flat-rate state pension worth £140 a week moved a step closer today when the Government revealed the results of a consultation with pensions industry.   The results of the consultation  gauged support for a single-tier system – worth £140 a week in today’s prices – which does away with means-testing and allows years spent caring, raising children or in self-employment to count towards an individual’s state pension.

Whichever route is taken, 12million existing pensioners are not expected to be included in the reforms.

Statisticians at the Department for Work and Pensions have calculated that it will cost £10billion a year to include those retiring between 2011 and 2016 in the reforms. Any changes won’t take place until the next parliament, which starts in 2015.

Former Downing Street adviser Ros Altmann, now director-general of over 50s group Saga, wants the Government to dig deep and make existing pensioners part of its new deal.

state pension

She says: ‘I would like to see the Government extend this new system in some way to existing pensioners as well, even if from a later age, so that the political pain of pension reform can be minimised. There are no easy answers, but maintaining the status quo would be a disaster.’
‘A revamped state pension would enable everyone to see that there is a clear foundation for their retirement, and that it pays to save. They can then build on this through their own pension and savings.’
A survey of young people found almost half of those aged between 18 and 34 would save more for their old age if they knew how much state pension they would get.

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