The £140 pension for all
The state pension system is to be given the biggest shake-up since its inception more than 50 years ago.
Ministers are planning a simplified payment which will see everyone receive the same amount – around £140 a week, far more than at present.
The proposal, to be detailed in a Green Paper before the end of the year, would benefit women and married couples. It would also end the indignity of means testing and, say coalition sources, will pay for itself, largely by reducing bureaucracy.
The present basic state pension is paid at £97.65 for a single person and £156.15 for a couple with a means-tested top-up for the poorest to give every pensioner a minimum income.
Work and Pensions Secretary Iain Duncan Smith and Pensions Minister Steve Webb are suggesting a new ‘single tier’ state pension which would replace all existing payments. If paid at the expected £140 a week, that would mean an income of £7,280 per year or £14,560 for a pensioner couple.
Setting the level of the new single-tier state pension above the current minimum income guaranteed to pensioners – £132.60 a week – will reduce reliance on means-tested benefits, ministers say.
The reform would be particularly good news for women, who often fail to qualify for the full basic pension because they have taken time out from work to bring up children and have not built up enough National Insurance contributions. Instead it would be based on residency in Britain.
Ministers aim to introduce the new pension towards the end of this Parliament in 2015. Sources say it is vital that it is in place before the pension age for women is increased to 66.
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£140 = $222.23Au = $220.10 Us = $224.44 Ca