Steve Webb: Delivering a simpler, fairer pension system


 

 



 

I am happy with the Coalition's state pension reforms. They will deliver a single, simple and decent pension for the people of Manchester.By April, the state pension will  £650 more than when Labour were in power. This means the basic state pension is now at its highest share of average earnings since 1992.

The worrying fact is that for many, the state pension is often not enough to live on.  The complicated nature of the current system means people today don’t know what they will get when they retire which discourages them from putting anything aside. People who have contributed, either through paid work or caring or in some other way, should be guaranteed a pension clear of the basic means-test, and one that gives them security in retirement.

The reforms mean,

  • The new single tier pension, which will apply to anyone retiring after 2017, is equivalent to £144 a week. The basic state pension is currently £107.45.

  • For the first time men and women will be treated equally.

  • Self-employed workers will be included fully for the first time.

  • You no longer lose out if you decide to bring up children or become a carer.

  • Every bit of pension people have built up so far will be honoured.


Liberal Democrats have been campaigning for decades to deliver, and in Coalition we are delivering these radical plans so today’s workers can retire on a single, simple, decent pension.”

What other are saying about the plans;

Liberal Democrat Pensions Minister Steve Webb said:

“The current state pension system is fiendishly complex, after seventy years of tinkering by successive governments, and Gordon Brown’s strategy of means-testing has failed those pensioners it was designed to help most.

“We need a simple, single state pension, set above the basic means test, which enables everyone to work towards a decent income in retirement and encourages more peoples to save for their old age.”

 

Joanne Segars, Chief Executive, National Association of Pension Funds said:
“Today’s announcement for a simpler, more generous state pension is a much-needed shake-up that will ultimately help millions of pensioners and savers. For the first time in a generation, people will know that it pays to save, and that whatever they put aside won't be eroded by means-testing when they retire.”

Dr Ros Altmann, Director-General of the Saga Group and pensions expert said:
“Such radical state pension reform is long overdue and it will be a huge step forward to have a single, flat-rate state pension, without mass means-testing in future.  This will make it safer to save, which is essential as auto-enrolement extends across the workforce.”

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