Azara Blog: Proposal to reform the state pension system

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Date published: 2011/04/04

The BBC says:

Plans for a new flat-rate state pension and a system to automatically raise the pension age have been published.

Under government proposals, the existing means-tested arrangements would be replaced for new, but not existing, pensioners.

The current full state pension is £97.65 a week, but can be topped up to £132.60 with pension credit.

This could be replaced by a new £140 flat rate, with inflation expected to push this up to £155 by 2015 or 2016.
No set date for implementation has been revealed.

This is the first major proposal of the LibCon government that makes any sense, although of course the devil will be in the detail.

Unfortunately one thing the government has not decided to do is to put in legal safe-guards for members of private pension schemes. Companies often run pension schemes for their own employees and can currently legally not properly fund these schemes, and even take money out. All pension schemes should be run by people independent of the company and the company should have no control at all over it. Most of the scandals the last N years to do with pensions are not about the vagaries of the State pension scheme but of the dubious conduct of private pension schemes.

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