Government proposals for radical simplification of the basic state pension have been broadly welcomed by the industry.
The Department for Work and Pensions confirmed on Monday plans to publish a green paper targeting “a simple, decent state pension for future pensioners”. The paper is expected in November this year.
Hymans Robertson head of public sector John Wright says a universal state benefit of around £140 per week, the figure the DWP is expected to propose, could be “another piece in the jigsaw” of pension reform.
He says: “With a universal pension, every pound you save is a pound worth saving, which should help the Government promoting automatic enrolment and Nest to the general public. It should also help encourage private sector workers to save.”
“When we see the whole package of things going on at the moment, it is all very joined up.”
The National Association of Pension Funds, which has long advocated a higher state pension for all, says the change is “long overdue”.
Chief executive Joanne Segars says: “The UK’s state pension system is the worst in Europe, and we really need a simpler, fairer and more generous system. Retirement ages are heading upwards, and the trade-off for having to work longer must be a better state pension.
“A clearer, flat-rate state pension would provide much-needed certainty to savers and pensioners, and would cut bureaucratic red tape. Women who are short-changed by the current system stand to get a much better deal.”