28 July 2011
On 4 April 2011 the Department for Work & Pensions
(DWP) published a Green Paper detailing two potential routes for
state pension reform.
The first was a proposal to keep two state pensions, but to move
forward the planned flat rating of the State Second Pension (S2P)
scheme to 2020 from the original target date of 2030. The second
proposal would see the introduction of a single-tier State Pension,
for those who retire after a yet to be determined date in the next
parliament, of £140 a week (in today's prices).
The DWP has today announced said that they received around 1,700
responses to the consultation with 1,600 of these coming from
individuals and around a 100 from various Stakeholder groups. Over
three-quarters of the organisations that responded favoured the
single-tier pension approach.
The Minister for Pensions Steve Webb said:
"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. 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. 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."
Parliament will now consider the feedback.
The full DWP Press Release and a summary of the responses
received can be found here:
DWP - State Pension Reform