A new flat-rate pension is expected to be worth at least £155 a week for each individual, it emerged this week and Ministers will soon press ahead with proposals for the most radical reform of the state pension system since its inception.
The new system will provide a guaranteed level of support greater than the amount people currently get through the basic state pension and means-tested pension credit. Women, who often do not receive a full state pension as a result of taking time out of work to look after children, will be the biggest winners as a result of the flat-rate payment.
But it will only be available to people reaching the state pension age from now, rather than existing pensioners. It had been expected that it would be about £140, but because it will not come into effect until 2015 or 2016, inflation will push the figure up.
The current full state pension is £97.65 a week for an individual, but is topped up to ensure a minimum income of £132.60. For a couple, the full state pension is £156.15 or at least £202.40 when pension credit is added. This will also rise under the new system.
APA
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