Pensions minister Steve Webb has set out a “rapid” timetable for introducing radical reforms to the state pension, with legislation expected to be put forward later this year.
Earlier this month, the Government tabled proposals to introduce a new, single tier state pension worth £144 a week for future retirees.
The publication of the white paper was subject to significant delays as the Department for Work and Pensions and the Treasury wrestled with complexity involving people who had contracted-out of the state second pension.
The Government’s solution to the problem will see those who have contracted-out have their state pension entitlement reduced.
If this figure is below £144 a week, the person will be allowed to accrue extra benefits, leading some in the industry to raise concerns about the fairness of the proposals to people who contracted back into the state pension.
Aviva corporate benefits head of policy John Lawson says people who contracted-in in the early 2000s could be £20bn worse off compared to those who contracted-out.
Speaking at the launch of the ‘Nest Insight’ report last week, Webb said: “The single-tier is crucial to underpinning automatic enrolment.
“The pace now will be very rapid. The select committee has put out its call for evidence and the report is due back before Easter.
“We have scrapped leave in the department during that period and the plan is to introduce legislation this year and get it on the statute book next year.”