Call for £109 pensions for all

By THIS IS MONEY
Updated:

 

OVER 10m pensioners would be lifted off means-tested benefits if a simpler, universal Citizen's Pension was introduced, a pensions group said today.

Elderly people

The National Association of Pension Funds said every pensioner should received a flat £109 a week regardless of how long they had worked or how much they had earned throughout their career.

The group said the pension would be fairer to women and carers who often receive smaller payments under the current system because of the long periods they haven't worked.

It added that it would help provide a more secure future for pensioners and would make it easier for them to save as they would know what they are in line for. But the bad news is that people may have to work up to 69 to fund the scheme.

Christine Farnish, chief executive of the NAPF, said: 'Since our original proposals for a Citizen's Pension were published three years ago, the debate on pension reform has moved on significantly.

'People want a simpler, fairer system, which does not penalise women who have taken work breaks, and which does not subject millions of pensioners to means testing.'

The group said a Citizen's Pension would cost no more than the current scheme as long as the money currently spent on the basic state pension, State Second Pension, including contracting out rebates, and the Pensions Credit was used.

The future cost of raising the Citizen's Pension in line with earnings could be met through either raising the state retirement age to 67 by 2030 and increasing National Insurance contributions by 1.5%, or by further increasing the retirement age to 69 by 2040.

Around eight out of 10 people questioned by the organisation said they would prefer equal pension payments for both men and women.

Pensions Commissioner Adair Turner is due to deliver his recommendations on how to overhaul the UK system towards the end of November. He recently told the TUC conference that there would be no easy decisions and that workers could face a longer working life of higher taxes.

In last year's report, Turner highlighted a £57bn pensions shortfall, warning young adults aren't saving enough for a comfortable retirement.

editor@thisismoney.co.uk

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