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Single-tier state pension moves closer

Single-tier state pension moves closer

Category: Pensions

Updated: 05/10/2012
First Published: 10/05/2012

MONEYFACTS ARCHIVE
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a single-tier state pension should soon become reality, after the Government reiterated its desire to introduce the measure in today's Queen's Speech.

In the speech – which is used to outline plans for new legislation in the next 12 months – the Queen said the Government would bring forward plans to 'reform the state pension, creating a simple and sustainable foundation for private saving'.

At present, the maximum state pension can be topped up to £137.35 with pension credits.

It is to be replaced with a £140 a week measure that will be available to all, with the pension to increase in line with inflation.

It is expected that payments will push past the £150 mark in the next three or four years.

Joanne Segars, chief executive of the National Association of Pension Funds, said that the organisation had long called for a single-tier state pension.

" We are delighted by this confirmation of the Government's commitment to a long-awaited, landmark reform," she added.

"This is another big step towards a simpler, more generous state pension that no longer penalises people for saving.

"A new system will take millions out of means-tested benefits and will encourage people to take control of their old age by saving towards it."

The speech was also used to confirm plans to increase the age at which people can take the state pension.

As has previously been outlined, the state pension age is to increase to 66 for both men and women by 2020.

It will then jump to 67 in the following six to eight years, and continue to rise in line with life expectancy.

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