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Duncan Smith condemns old pension in announcing new proposals

Jonathan Winston Jonathan Winston
2 min read

The pensions secretary has called the current pensions system “bewilderingly complex” and a disincentive to saving for retirement as he announced new plans to simplify the system.

Iain Duncan Smith confirmed recent reports by revealing that a Work and Pensions Department green paper will introduce a new flat-rate payment of £140 a week, meaning that couples will receive £280 a week though by the time the new rate comes in, in 2015, it will have gone up to £310 a week. This compares to the current rate for couples of £156 a week though that can rise to £202 for those qualifying for the means-tested pension credit.

However the plans have been criticised by some, notably for the fact that the new rates will only apply to those reaching pension age after 2015, leaving existing pensioners stuck on lower rates. While pensions minister Steve Webb said the new proposals will: “help secure a fair, decent and simple state pension fit for the 21st century”, Dot Gibson, general secretary of the National Pensioners Convention, said that millions would be left with an inadequate state pension and a complicated means-tested system.

The green paper will also mean changes to the retirement age with both men and women having to work until they are 66 by 2020 and leaving open the possibility of raising the age higher in the coming years. The government is looking into either linking the pension age to life expectancy or reviewing the situation every few years.

http://www.dailymail.co.uk/news/article-1373384/Iain-Duncan-Smith-Couples-300-week-pensions-reform-shake-up.html

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