State pension shake-up plans ‘fair’
Plans for a radical shake-up of state pensions are “fair”, Prime Minister David Cameron has insisted.
The coalition’s proposals include a single flat-rate state pension, equivalent to around £144 in today’s money, to be introduced for new pensioners from 2017 in a bid to simplify the system.
But the plans have been described by critics as little more than a “con trick” which could affect a hard-fought deal on public sector pensions.
Appearing on ITV’s Daybreak, Mr Cameron said: “This will help a lot of women and a lot of lower paid workers who otherwise wouldn’t get a decent state pension. We’re going to have later retirement ages as we’re all living longer. I think it’s fair to ask people to work a bit longer as we are all living longer.”
Ministers said the reform will create a simple flat-rate pension set above the means test (currently £142.70) and based on 35 years of National Insurance contributions, and will “hugely benefit” women, low earners and the self-employed, who under existing rules find it almost impossible to earn a full state pension.
Around six million workers will face higher National Insurance payments in future as the practice of “contracting out” the state second pension to employers is ended. Those affected are expected to include more than a million private sector staff enrolled in final salary schemes, and an estimated five million public sector workers.
The GMB union said there could be “very serious consequences” which could affect an agreement on public sector pensions, while the National Pensioners Convention described Monday’s White Paper as little more than a “con trick” for future generations, by offering them less than they get now, asking them to pay more and work longer before they can get it back.
But ministers will argue that by replacing today’s complex system of add-ons and means-testing, the single tier will provide certainty to people about what they will get from the state and provide a better platform for them to save for their retirement.
Work and Pensions Secretary Iain Duncan Smith said: “This reform is good news for women who for too long have been effectively punished by the current system. The single tier will mean that more women can get a full state pension in their own right and stop this shameful situation where they are let down by the system when it comes to retirement because they have taken time out to care for their family.”
Pensions minister Steve Webb said: “The current state pension system is too complicated and leaves millions of people needing means-tested top-ups. We can do better. Our simple, single tier pension will provide a decent, solid foundation for new pensioners in an otherwise less certain world, ensuring it pays to save.”
What are your views?
Latest posts by Silversurfers Editor (see all)
- Renting Property In Spain - March 27, 2017
- Buying Property In Spain - March 27, 2017
- Win 2 nights on board the Luxury Sunborn Superyacht in Gibraltar! - March 21, 2017
- Should MPs have more than one job? - March 20, 2017
- A simple way to maximise your ISA - March 17, 2017
Leave a Comment!
Community Terms & Conditions
These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.
You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.
be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.
Contributions must not:
contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
Nurturing a safe environment
Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.
We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!