The introduction of a £140-a-week flat rate state pension has moved a step further after more than three-quarters of the pensions industry backed the government proposal.
Over three-quarters of organisations who responded to the government’s consultation backed the move.
In April pensions minister Steve Webb unveiled two potential reforms to the state pension:
• Option one: a two-tier state pension where the means-tested second state pension (S2P) becomes flat rate by 2020. Proposals already exist to create a flat-rate S2P by 2030.
• Option two: a £140-a-week flat rate, single-tier pension set above the level of the pension credit standard minimum guarantee, effective from 2015.
Respondents overwhelmingly backed option two. Pensions minister Steve Webb said: ‘A simple, decent state pension, that is easy to understand would give people more clarity and certainty about what they will get from the state. It is this clarity and firm foundation that will help people make decisions about saving for retirement – a crucial step as we prepare to enroll 10 million people into workplace savings from 2012.’
Option one was an unexpected addition to flat rate state pension reform proposals, which had been trailed since October 2010.
Respondents included businesses, defined benefit schemes, pension’s administrators and trustees, the voluntary sector and the public.
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