'We are clearing up the mess of the state pension system'
AFTER decades of tinkering by successive governments, we are restoring clarity and clearing up the mess of the state pension system.
My first act on becoming Pensions Minister in 2010 was to help existing pensioners. I restored the link to earnings that was broken in the 1980s, and in so doing we boosted the incomes of millions of older people.
-
Steve Webb, minister for pensions
We are now planning a simpler state pension for new pensioners from 2017.
The "single tier" pension will be one flat rate, set above the level of the basic means-test and payable after 35 qualifying years of National Insurance (NI) contributions.
Free 121 PT session and personal health check (ladioes only) at a time suitable for you.
Terms: Call Gymophobics 01482 423130 and qoute 'Hull Daily Mail'. Redeemable at Hull and Beverley Gymophobics.
Contact: 01482 423130
Valid until: Sunday, June 30 2013
This will be a state pension fit for the 21st century and much better suited to the way we live and work today.
Last year, I introduced a duty on employers to enrol staff into a workplace pension.
Millions more people will now have a chance to save into a pension, many for the first time, and get a contribution from their employer.
These reforms represent the biggest change in the world of pensions for more than a century. And it is long-overdue.
For decades, Britain has muddled on with not one but two state pensions.
The first is a basic state pension, which is far from "basic". Complicated rules exist for people who become divorced or widowed. Special arrangements for married women date back to times when men were given pensions and women were simply thought to need husbands!
The second is a state earnings-related pension, previously known as Serps, but now called the state second pension.
This scheme is mind- boggling, with variable amounts paid out according to past earnings and the fact some people can opt out and rely on their workplace pension scheme.
And still many people don't build up enough from these pensions combined, so additional and complex means-testing provides a top-up.
In the new system, every- one will qualify for a pension in their own right, doing away with archaic rules about claiming pensions based on someone else's NI contributions.
Like today, people with caring responsibilities will have those years recognised.
Both mean women who have spent time at home bringing up children will benefit. Three-quarters of a million women reaching state pension age in the first ten years after the new state pension is introduced will receive on average £9 a week more than they would because of the way the new pension will be calculated.
Britain's 4.3 million self- employed people, whose NI contributions do not currently count towards the Second State Pension will also benefit. In future they will be able to qualify for the full amount of single tier pension.
Overall, more than half of Britain's over-25s will receive more state pension income during retirement as a result of these reforms.
The first step to being financially secure in later life is knowing what you can expect to get as a minimum. The second is being rewarded for saving on top, not penalised.
So you can start planning for the rest of your life.
3 Comments
by PukkaGen
Friday, March 01 2013, 4:54AM
“Just who is this man kidding ?
Lets look at what he said. "we are restoring clarity and clearing up the mess of the state pension system."
But he has created an even bigger mess. If it was difficult to understand before it is now impossible and Einstein is dead.
"My first act on becoming Pensions Minister in 2010 was to help existing pensioners" he said.
But he ignored the frozen pension issue which he promised to deal with when in opposition.
"We are now planning a simpler state pension for new pensioners from 2017." because he was unable to fix the existing one
"Millions more people will now have a chance to save into a pension, many for the first time, and get a contribution from their employer." Well,the employer had to contribute before Steve !
"For decades, Britain has muddled on with not one but two state pensions" No Steve, make it three, you forgot the frozen pensioners again. tut tut..
"In the new system, every- one will qualify for a pension in their own right, doing away with archaic rules" but the frozen pensioner who contributed in the same way as everyone else will still be frozen out and recive no increases ever.
"Like today, people with caring responsibilities will have those years recognised"
Oh good, you mean that you will now unfreeze us ?
"The first step to being financially secure in later life is knowing what you can expect to get as a
minimum. The second is being rewarded for saving on top, not penalised."
Is this confirmation that the freezing will be lifted then ?
So you can start planning for the rest of your life unless Steve Webb continues to deny the 4% of pensioners affected by this wholly unfair, discriminatory and irrational ( his words ) not to mention unjust policy.
Back to the drawing board Steve !”
by RobtheFox
Friday, March 01 2013, 4:09AM
“Webb says "We're clearing up the mess of the State Pension System"...and then produces a Bill by which so many have been confused that I doubt if even he really understand it.
I mean how can implement a law that continues to blatantly discriminate against 4% of the total number of retired UK citizens?
Yes, he is bringing into the scheme sections of the population who, in many cases, have made little or no contribution to the NI Fund but continues to deny many who have, not only a thirty five year qualification but one of forty-four years, the right to have the pension they have earned index linked.
It is totally absurd for Webb to claim that one of his basic principles in formulating the Pension Reform Bill was that of "fairness". What is fair about increasing pensions annually for those living in the UK, the EEA and especially countries like Bosnia Herzegovina, Israel and USA but not for those in, for example Australia, Canada or Thailand? These pensioners, when working, contributed to the NI Scheme on the same terms and conditions as everyone else but in retirement are not allowed to withdraw on the same terms and conditions as everyone else.
Why should these people be frozen solely because they are in the "wrong" country? Country of residence is totally and utterly irrelevant; the government is dealing with UK citizens on this issue not foreign countries.
There is no legal, moral, financial or administrative justification for this policy - previous Secretaries of State for the DWP - Twigg in 1999 and Parnell in 2007 - have stated there is no reason why the UK cannot pay pension increases world wide. Current Senior Government Minister Oliver Letwin MP has described the policy as irrational.
This continued discrimination against the frozen pensioner merely confirms the moral corruption of this and successive previous governments and anyone trying to fathom out the rest of Webb's hots-potch needs to be wary of other probable failures in securing Fairness, Justice and Equality for all pensioners.”
by john8167
Thursday, February 28 2013, 1:01PM
“What is consistently not revealed is that millions of existing pensioners and those who will retire before the single tier becomes available, including many who will have contributed for the required 35 years, will NOT be paid £144 per week before tax, but will continue to receive £107.45 per week before tax. This is disgustingly unfair and demands correction.
In response, my MP has dangled a 'triple lock' red herring in front of my nose. It stinks. Triple lock applies to ALL pensions. It is irrelevant to the unfairness of the proposed changes.
I shan't be voting Conservative or Lib Dem (Webb is Lib Dem) in the next election unless this scandal is sorted out.”