Flat-rate state pension confirmed in Budget

| March 23, 2011 | 0 Comments
Flat-rate state pension confirmed in Budget

In today’s Budget, Chancellor George Osborne confirmed that the new flat-rate state pension will be brought in but will take many years to come into force.

According to the Government, the new pensions system should make pension planning easier to understand – stripping out the current complex means-tested payments system and will move towards a flat-rate payment for men and women.

The basic state pension will see the introduction of one universal payment – £140 a week, as confirmed in today‘s Budget.

This compares with the current basic state pension of £97.65 for a single person and £156.15 for a couple.

However, Mr Osborne pointed out that the new scheme would not apply to the millions of people already being paid a state pension.

The Budget document, known as the red book, said: “It is not clear to working age individuals what they might receive from the state, in particular from the state second pension, making it difficult to plan retirement saving.

“The government will look to reform the state pension for future pensioners so that it provides simple, contributory, flat-rate support above the level of the means-tested guarantee credit.”

Consultation by the Department for Work and Pensions (DWP) will commence shortly and further details will follow in the coming months.

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