Government committed to £140 a week pension

Thursday, 19 January 2012

Government officials have denied abandoning plans for Britain's new flat-rate state pension - and say they are committed to the £140 a week policy.

Reports last weeks suggested the flagship reform proposals had been "sunk" as the coalition battled to reform public sector pensions.

Labour shadow pensions minister Gregg McClymont questioned whether the plans were under threat last week.

Pensions expert Tom McPhail, of Hargreaves London, added that the reform "seems to have stalled and possibly it has been derailed by the Government's battle to reform public sector pensions".

It is almost a year since pensions minister Steve Webb unveiled plans to scrap means-testing, instead bringing in a flat-rate £140 a week state pay out for pensioners.

A spokesman for the Department for Work and Pensions said the MP remains 'fully committed' to the new scheme.

He said: "This is very important to the entire landscape of pensions reform."

Full details of the plans are expected "this year" - although ministers have suggested that any reform is unlikely to take place until 2015.

Currently, the basic state pensions pays just £102.15 a week, with the poorest being topped up to more than £130 weekly.

A new flat-rate system would take this 'top-up' away and would instead give qualifying pensioners - thought to be those with 30 years National Insurance contributions - around £140 a week.

The scheme is unable to affect those who have already retired as the cost would be too high.

British pensioners would instead be separated by a two-tier system, with some on the new £140 flat-rate and others on the current top up pension.