Plans to stop people claiming state pensions based on the work of their spouse are to be introduced by the government.
The future flat-rate pension unveiled by the Government will be worth £144 in today's money. But who stands to benefit and who loses out?
Ministers promise a richer retirement for women, low earners and the self employed, but others warn people must work longer for less reward.
The head of the National Association of Pension Funds was warned that George Osborne's plan to bring forward the flat-rate pension and social care cap to 2016 could lead to "big mistakes" being made:
– Joanne Segars, National Association of Pension Funds
We are squarely in favour of these vital reforms but the government must ensure that the implementation of these changes is workable for pension funds.
This is a very tight time frame and we have to wonder if it can be delivered ...
It is essential to give pension funds the flexibility and time to adapt and make the changes.
Chancellor George Osborne has said that the earlier introduction of the "generous" flat-rate pension will provide a "huge boost for people who want to save for their retirement".
– Chancellor George Osborne on BBC's andrew marr show
That is another example of how this government is helping people who want to save, people who want to leave something to their children like their home, people who want to get on in life, people who do the right thing.
The government will bring forward the introduction of a new, simple state pension system and a cap on the cost of social care, Chancellor George Osborne announced today.
He told the BBC's Andrew Marr Show that the single-tier pension will be introduced in 2016, a year earlier than previously planned, and would be a "huge boost" for people who want to save for their retirement.
The cap on social care costs, originally planned to be set at £ 5,000 and introduced in 2017, will now also be introduced in 2016 at a level of £72,000.
The single-tier pension is set to be worth around £144 a week.
The amount of people who signed up to their workplace pension scheme in 2012 dropped to 46 per cent - the lowest level since 1997.
Some 83 per cent of public sector employees and 32 per cent of those in the private sector were enrolled in a scheme, according to figures from the Office for National Statistics.
Independent economists claim changes to the state pension, which were set out today by the Government, will hit more people than they will help. The self-employed and women who have given up work to raise families will benefit.
But the Institute for Fiscal Studies says millions of others will lose out. Our Political Editor, Tom Bradby, looks at the winners and the losers.
– Dot Gibson, National Pensioners' Convention
The Government has not been completely honest in today's announcement. The fact is that without additional money, our state pension system will remain completely inadequate.
Future pensioners have little chance of putting aside any money given our low wage economy or building up a decent company pension and will therefore have to rely more and more on the state system.
But even at today's prices, £144 a week still represents a state pension that is well below the official poverty line for older people.
Labour claims more than 400,000 women on the verge of retirement will miss out under the Government's pensions reforms. Shadow Pensions Minister, Gregg McClymont, said the plan would create "steep cliff edges and significant costs".
Even at my speed reading of today's White Paper there will be heavy losers, steep cliff ledges and significant costs if this proposal goes ahead. For example, the briefing from the Government over the weekend was at pains to emphasise the women-friendly aspect of these measures.
But can I ask you directly about the 429,000 born between 6 April 1952 and 6 July 1953? Is it the case that these 429,000 women will not qualify for the single tier state pension, yet men born (between) the same dates will do so? Is that the case?
The government has published its plans for pension reform online. You can read the White Paper in full here.
– Steve Webb, Pensions Minister
More than 10 million people at work today are not saving enough to generate the sort of income they want to receive in retirement. A combination of a single, simple, decent state pension and the right to a workplace pension with a statutory contribution from their employer will mean - for the first time - there will be a firm foundation for retirement for the workforce of today.
Outlining the pension shake-up in the Commons this afternoon the Pensions Minister, Steve Webb said:
The overall cost of the new system will be the same as the one it replaces. This is not a pensions giveaway for the next generation. A higher flat pension is only affordable because in the long term people will not become entitled to very large earnings-related pensions through the state system.
But in a world where everyone will be automatically enrolled into a workplace pension with a contribution from their employer it no longer makes sense for the state to be running its own, separate, earnings-related pension scheme.