SIMPLIFYING THE STATE PENSION
22 August 2012
The amount of state pension money paid out to pensioners can differ by more than £200 a week – that’s a difference of £10,000 a year. This is because the level of basic and additional state pension payouts can vary so much in the current system. According to the latest DWP administrative data, state pension income varies from around £7 a week to £230 a week. Around 130,000 people get £7 or less a week and the same number of people get £230 or more a week. State pension regulations have multiplied so much over recent decades and made the system so complex that people have no way of working out what they will get a week, and can’t budget properly for their needs. “The range of state pension payouts at the moment is simply staggering. The current system is so complex and would baffle even Einstein. Worse, if people have no idea what they will get, they can’t make sure they have enough savings for their retirement. “We can’t go on playing roulette with pensions. A flat-rate single-tier state pension will restore simplicity and give people certainty instead of chance. And it will provide a sure foundation for further saving.” The current state pension is made up of the basic state pension and various additional state pension entitlements. Pensions Minister Steve Webb said:
It will be replaced by a simple flat-rate state pension for new pensioners set above the level of the means test, currently estimated at around £140 a week.
A White Paper will set out further details later this year.
DWP press release
CHANGES TO PENSION STATEMENT FORECAST
1 November 2012
On 22nd October 2012 the DWP introduced its new State Pension statement service which has replaced the old State Pension forecasting service.
A State Pension statement gives individuals an estimate of the State Pension they may get when they reach their State Pension age, based on their National Insurance record as it stands when the statement is produced. It also includes simple information that will help the recipient understand what effect further qualifying years may have on the amounts shown in the statement. From 22 October 2012 State Pension statements are available by telephoning or writing to the Future Pension Centre. From 29 October 2012 customers will also be able to get a State Pension statement on-line via www.gov.uk . A new leaflet (DWP040) has been designed to complement the statement. To aid the reader, and ensure there is a clear link between the leaflet and the statement it accompanies, the leaflet presents the more detailed information in the same subject order as it appears in the statement.
CIPP Policy News Journal
12/04/2013, Page 285 of 362
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