Flat-rate pension to be based on years of work


New flat-rate pension - old ladyThe new flat-rate pension that is soon set to come into effect, will be based on the number of years of contributions an individual has made into the National Insurance scheme.

The stated reasoning behind the new flat-rate pension is to remove the means-testing of pensioners – something which discourages those approaching retirement from saving.

In order to qualify for the maximum pension, you will need to have paid into the system for at least 30 years or have acquired sufficient credits to make up for any shortfall. Women who choose to stay at home and look after children under the age of 12 will be compensated with credits and not suffer as they would now.

The exact figure for the new flat-rate pension has not been announced but it is rumoured to be around £140 a week – about 5% higher than the current £132.60. However, those pensioners who might be expecting a windfall are going to be disappointed – the increase will not be retrospective and will only apply to those who are yet to retire.

While the government is publicly declaring this a victory for the ‘it pays to save’ campaign, it also means that those who have lost their jobs or who cannot find work are dependent upon being awarded sufficient credits to claim a full pension. How long before those credits begin to be eroded as part of governmental clamp down on the ‘Indolent millions’ who are perceived as not being prepared to get off the sofa and do a day’s work?


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This article was posted by James Brandon

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