Paul Leatherbarrow, Liverpool
Basic state pension to undergo major overhaul There is to be a major shakeup of the state pension system which will see pensioners receiving higher and easy to understand pay out under the new plans. A simplified payment system is being drafted which may involve a flat rate pension £140 per week (£7,280 per annum) and bring an end to means testing. The new plans will be more beneficial for women and couples than current system and should be brought forward later this year. The proposals should remove the uncertainty about how pension savings will affect future benefits, which currently is a big disincentive to save for retirement. The new proposals are affordable to the government due to the default retirement age for the state pension increasing over the coming years. The plans for a flat rate state pension will be good news for those making extra provision for retirement as it will mean an end to means testing, For a long time, many have felt it was unfair for those who have made their own provision to see those who did not be given a helping hand. But be aware the deconstructing of the machinery of pension credit and s2p will take time Today the basic state pension is £97.65 per week plus pension top credit which increases the amount to £132 per week if you have insufficient savings. The new pension is expected to be in force by 2015 The new rules will only apply to new retirees from 2015 onwards, which means those already in receipt of state pension benefit will still be means tested under the old system. (To include those already in retirement would cost £10 billion, which is too costly) The Government believe it may be possible to provide something for the over 75s later on Many believe it will only be available to those who have contributed to NI for over 30 years, if your contributions amount to less you may still have to rely on some forms of means testing. 28/10/2010 The government has announce d that the state retirement age is to increase to 66 by 2020 for men and women, announced as part of the Government spending review .
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