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Duncan Smith reaffirms commitment to single-tier state pension

Treasury 480

Conservative work and pensions secretary Iain Duncan Smith has reaffirmed the Government’s commitment to introducing a single-tier, flat-rate state pension.

Last month, reports surfaced suggesting prime minister David Cameron had called for a re-think of plans to introduce a single state pension payment worth around £140 a week for future retirees due to concerns the reform may not find favour with core Conservative voters.

Addressing the Conservative party conference yesterday, Duncan Smith said the flat-rate pension is “a great reform” which will be introduced.

He said: “Labour nearly destroyed pension saving in the UK. Their means test meant those who tried to save too often retired on less than those who never saved at all. The result now is 11 million people who don’t save enough for retirement.

“So our auto-enrolment reforms mean up to 9 million workers will be saving through a workplace pension. And we are creating a single-tier pension which will mean, if you contribute, you will receive a pension above the means test.

“The single-tier will also ensure that those, such as mothers, who have taken a break in work, will receive full contributions for that time giving them a chance of their own full pension, for the first time ever.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. ” The result now is 11 million people who don’t save enough for retirement.”

    He means “won’t”……….

  2. It pains me to agree with Conservative policies (I must be getting old…) but we should never be in a position where someone who saves for their retirement doesn’t see any benefit for that sacrifice.

  3. @ Jim Hughes
    Nor should we see those who have contributed most suddenly have that reduced as will happen when a flat rate is introduced.

  4. Please tell me I’m wrong

    But the way I understand it is that those who have contributed most will see their pensions severely reduced. (I have several clients who get twice the suggested amount – they have never been rich, just had slightly over median salaries, worked for over 40 years and deferred for about 5). Is this a Tory party or is it some branch of New Labour?

    It looks like the Middle will be stuffed again. Presumably current entitlements will not be jeopardised. What about the 10.4% per annum enhancements for deferral? Presumably that too will be scrapped in the interests of equality – so there will be no incentive to defer. Live now. Usual Governmental encouragement.

  5. I have worked for 45 years starting when i was 15 and paid in until I retire. My pension is £110 per week. As I understand it those who have worked for 30 years will be getting £140 PW at today’s rates. How can IDS say it is a fairer pension for all, I think not. He states it will do away with all the red tape and be cheaper but when asked why he is not including existing pensioners he says they cannot afford it????. There are a lot of us existing pensioners out there, he should think again if he wants our votes next time. My wife also had time off to bring up our two children and gets £60 PW. Come on Cameron tell the truth, existing pensioners have been forgotten about or just discarded.Lastly IDS states it will do away with mean testing is that true and I will get the pension credit or is it going to be a three tier system.

  6. So new pensioners will get £140 per week. What about the old ones who have to remain on the “old” system? The ones who put a little bit by – just enough to wipe out the benefit of pension credit, so they scrimped and saved to try to enhance their income in retirement, only to be penalised for doing so. They would have been better off spending the money and receiving today’s pension credit. No, we don’t want a two tier pension system, what is introduced should be available to all – especially the older ones as they have put more into the system.

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