The Draft Pensions Bill which contains details of the significant reforms to current state pension system and bereavement benefits also includes amendments to the timetable for increasing pensionable age to 67 along with the introduction of a framework for considering future increases to pensionable age.
The reforms will see:
The introduction of a single – tier flat rate state retirement pension. The single - tier pension will be set at a rate above the Pension Credit Standard Minimum Guarantee which is currently £142.70 per week for a single pensioner.
Replace the state second pension, contracted out and other ‘out dated additions’ e.g. the Category D pension and the Age Addition.
The requirement for 35 qualifying years of NICs. Additionally there will be a minimum qualifying period of seven to ten qualifying years.
The introduction of the need for individual qualification, losing the facility to inherit or derive rights from a spouse or civil partner.
Remove the right to receive a deferred state pension as a lump sum payment although the ability to defer receipt of the state pension in return for a higher rate will still be possible. Employees who are contracted out will be brought fully back in to the state system and recognising the impact that this will have on both employers and employees, the government has stated a commitment to work closely with the pensions industry and employer representatives as well as representatives of employees as implementation approaches As we all know the Devil is in the Detail and we will I am sure be bringing more news about this subject and its impact as implementation approaches, however, in the meantime both the White Paper as well as the Draft Pensions Bill provide full details along with some fascinating information about the history of the State Pension.
SINGLE TIER PENSION – LAUNCH BROUGHT FORWARD TO 2016
20 March 2013
The government has announced that they will look to launch the new single-tier State Pension now in April 2016.
In January 2013 the Government published the White Paper – The single-tier pension: a simple foundation for saving' which set out plans for the single-tier pension. Since then feedback received from stakeholders has reinforced the need to reform the state pension as soon as possible and so to that end, and in line with the original intention, the government has looked at ways to deliver single-tier earlier than 2017 and can now confirm that the single-tier pension will begin in April 2016. By starting a year earlier it is estimated that around 400,000 more people will reach State Pension age under single tier, including every woman affected by the acceleration of the equalisation of the State Pension age. The government have committed to continue to work with stakeholders and the industry throughout implementation of the single-tier pension, and in particular to assist with a smooth transition during the end of contracting out.
Steve Webb, Minister for Pensions said " Our reforms will create a simple, decent State Pension, which is set above the basic means test sooner. The new State Pension will be
CIPP Policy News Journal
12/04/2013, Page 287 of 362
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