Government plans to simplify pension system

| October 25, 2010 | 0 Comments
Government plans to simplify pension system

Business Secretary Vince Cable has today unveiled a proposed reform of Britain’s state pension system, with the introduction of one universal payment.

This would replace the current system of earnings-related “top-up” payments, plus additional means-tested benefits.

Costs relating to the proposed reform were not divulged but it is intended to reduce inequalities between men and women, while encouraging people to save for their pensions.

According to many, it should make pension planning easier to understand - stripping out the complex means-tested payments system, which many do not claim for.

While full details were not provided, it is believed the one universal payment could be £140 a week.

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

Mr Cable said: “It’s to make sure people can look forward in retirement to a good state pension without means testing. We need something people can rely on,” he said.

The proposals have been welcomed by many as they would benefit everybody in retirement, including the wealthier.

However, it would be a welcome boost for women - many of whom miss out on a full state pension if they stop working or opt to work part-time to bring up their children.

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