Government to announce new flat-rate pension today
Published on 14 January 2013 09:00 AM
The Government is set to outline plans on Monday in a White Paper for a new, flat-rate state pension for all - which is due to start in April 2017.
The weekly payment is likely to be set at £144, plus any inflation rises between now and the start date.
Currently, the full state pension amount is £107.45 and this can be increased to £142.70, if someone is able to claim Pension Credit.
Details of the new pension have been eagerly awaited since the original announcement in 2011, with David Cameron and Nick Clegg again confirming its arrival last week in their mid-term review.
The aim of the new pension is to make the system less complicated and easier for people to understand.
The Pensions Minister Steve Webb said: 'At the moment, nobody has a clue what the state is going to pay them.
'We have a basic pension, a second state pension, a pension credit - it's fiendishly complicated. So we are proposing a simple system, not a more expensive one... that will help people plan for their retirements.'
Only for new pensioners
However, in a blow to those who have already reached state pension age, the new flat-rate amount will only be paid to new pensioners.
Anyone who reaches pension age before then will get their entitlement under the current system.
Age UK's response
Commenting on new pension, Michelle Mitchell, Charity Director General of Age UK said: 'The government's proposals for a single tier state pension could help transform retirement for future pensioners, bringing clarity and stability to a system which is currently opaque and unfair.
'We would also like to see the same imaginative thinking applied by the government to the issue of the current unacceptable levels of pensioner poverty to allow that age group the same peace of mind.'