Flat rate state pension moves closer after overwhelming support

Financial News

The government’s proposal to introduce a flat rate state pension of £140 per week has moved a step closer after receiving significant support from the pension’s industry.

Over 75% of organisations who responded during the government’s consultation period were in favour of the move.

Pension proposals

In April the government’s pensions minister Steve Webb announced two possible reforms of the state pension system with the £140 flat rate state pension being one of the options. The second option would have created a two tier state pension where the means tested second state pension (S2P) becomes flat rate by 2020.

The first option received the most support from the pensions industry.

Government reaction

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.’