Minister: Not a pension giveaway for the next generation

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.

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Pensions shake-up unveiled

Details of a shake-up of the state pension have been unveiled by the Government. A single flat rate, equivalent to around £144 in today's money, is set to be introduced for new pensioners from 2017 in a bid to simplify the system.