Industry supports government’s single-tier pension plan

DWP Said the Industry has Backed the Single Tier Pension for Future Retirees

DWP Said the Industry has Backed the Single Tier Pension for Future Retirees

The government’s consultation on state pension reforms reveals overwhelming support for a flat-rate £140 single-tier state pension, making the switching process almost certain in future that would significantly reduce the need for pensioners to apply for pension credit.

The Department for Work and Pensions had published a green paper, A State Pension for the 21st century, on April 4 suggesting two options for future pension reforms.

One option was to accelerate the implementation of the previous administration’s plan to move to a flat state second pension by 2020.

The other “more radical” suggestion would see the introduction of a single-tier pension of £140 at today’s rate for future retirees.

Out of the 102 responses from group stake-holders and 1,600 from individuals, more than three quarters of the organisations chose the single-tier option in principle.

“In spite of our best efforts to encourage take-up, pension credit has failed to reach over a million low income pensioners who are entitled to help,” said Pensions Minister Steve Webb.

“What we want to do is reform to create a simpler state pension that won’t leave people relying on means testing to make ends meet. A simple, decent state pension that is easy to understand would give people more clarity and certainty about what they will get from the state,” he added.

“It is this clarity and firm foundation that will help people make decisions about saving for retirement – a crucial step as we prepare to enrol 10 million people into workplace savings from 2012,” he said.

The ministers will now consider the feedbacks before detailed reforms proposals are brought out.

Leave your comment

  • (not published)