Single Tier pension plans

Prime Minister's Office, 10 Downing Street

January 14
00:00 2013

The government has today outlined plans to simplify the state pension.

The new Single Tier pensions system will provide certainty so people know what they will get from the state and make it easier for people to plan and save.

It will strip away add-ons and means testing to offer people a full state pension set above the means test (currently 142.70), based on 35 years of National Insurance contributions.

Appearing on ITVs Daybreak, David Cameron explained that the new system will be simpler and will benefit women, low earners and the self-employed.

The current system is too complicated; it also discourages saving because theres so much means testing. And also its not particularly fair on women, because if you take a career break you find it difficult to build up a decent pension. So the idea here is that for new pensioners in 2017 instead of the 100 or so basic state pension, itll be over 140.

A single State Pension cuts out a lot of the means-testing and also will help a lot of women, a lot of low-paid people who otherwise wouldnt get a decent state pension.

Under the present system, women, low earners and the self employed have found it hard to get past the basic state pension level of 107.45.

Nearly 3 million women get a state pension of 80, which compares to 450,000 men.

But when the Single Tier pension is introduced, 750,000 women will get an extra 9 a week in its first 10 years. And by 2040 it is expected that 80% of all people will get a full state pension.

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