Monday, 11 March 2013

Pensions grilling

Steve Webb, the Pensions Minister, is being grilled by MPs over reforms in the Pensions Bill this afternoon, including the £144 flat-rate pension.

So here's what's actually in the draft Pensions Bill:

Reforms to the State Pension system (the £144 a week single-tier pension)
This draft Pensions Bill contains provisions to introduce a single-tier pension which will, for future pensioners, replace the current two-component State Pension (basic State Pension and additional State Pension) with a single component flat-rate pension that is set above the basic level of means-tested support - likely from 2017.

Bringing forward the increase in the State Pension age to 67
The first change brings forward the increase in the State Pension age to 67 by eight years, as announced in November 2011. This means the State Pension age will gradually rise from 66 to 67 between 2026 and 2028.

Introducing a framework for future changes to the State Pension age
• a review of the State Pension age every five years, with the first review taking place in the next Parliament;
• the review to be based around the principle that people should expect to spend a certain proportion of their adult life in retirement; and
• the review to be informed by reports from the Government Actuary’s Department analysing the proportion of adult life people reaching State Pension age within a specified time period can expect to spend in retirement and from an independently-led body on other factors to be taken into account when setting the State Pension age.

Reforms to bereavement benefits
through the introduction of Bereavement Support Payment,  a single benefit to support people after bereavement

Amendments to private pensions legislation
including a new provision to allow regulations to be made to ban the practice of providing non-pension inducements to encourage individuals to transfer a cash equivalent value of their accrued rights from a Defined Benefit scheme to an alternative arrangement.

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