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£140 Pension for All

November 1, 2013

lifestyle

Ministers are planning the most historic shake-up for the state pension in more than 50 years. Their plans are to make everyone get the same basic amount of somewhere around £140 per week, although this figured is yet to be confirmed. If these proposals are rolled out it would mean that a single person would receive a yearly income of £7,280 and £14,560 for a couple.

The proposal is expected to be detailed in a Green Paper before the end of the year and will particularly benefit women and married couples. This scheme will not happen overnight and is a long term plan expected to be rolled out around 2016

Government sources have said that it will pay for itself by reducing the need for administration by ending means testing.  The current state of affairs is that a basic state pension pays out £97.65 for a single person and £156.15 for a couple, there is also a means testing which entitles the poorest pensioners a minimum income.

This is good news for women who often fail to qualify for the basic state pension because they have taken time out of work to bring up children and therefore haven’t managed to build enough National Insurance contributions. The Daily Mail reported that this whole notion of means testing will be scrapped and it will be based on residency in Britain instead.

By all accounts this is a pretty radical change and understandably has its critics. Some of which believe that it is seen to be unfair to the poorest as richer pensioners will also have their income boosted. But this reform will be a major boost to signal-earner couples who will possibly alter the way they need to fund their retirement.

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