Some of the poorest pensioners will not benefit from the proposed white paper state reforms according to the Pensions Policy Institute.
Also a potentially high level of eligibility to pension credit in the future will threaten the success of personal accounts according to the educational charity in its damning assessment of the white paper.
The PPI says the white paper proposals are described as providing a state pension of £135 a week from basis state pension and state second pension combined. But because of a long transition, gaps in coverage and the continued price of indexation of S2P, the majority of people over the state pension age may still not have as much as £135 per week from the state, even by the year 2050.
As a result, as many as 90 per cent of individuals over the state pension age will have a state pension income of less than £135, making them potentially eligible for pension credit.
The PPI has invited minister for pension reform James Purnell, Conservative shadow secretary of state for work and pensions Philip Hammond and Liberal Democrat shadow secretary of state for work and pensions David Laws to respond to the paper in a meeting beind held in London today.
The paper says: “Some of the poorest pensioners will not gain significantly from the white paper state reforms. When the proposals are introduced, gains are concentrated on pensioners with the highest incomes. Overall, te impact on the distribution of pensioner incomes is small.”