Plans announced by Lib Dem Minister Steve Webb MP to bring in a flat rate single pension of £144 a week will benefit thousands of residents of Chester claim local Liberal Democrats. From 2017, people retiring will no longer have to face a bewildering array of pension entitlements and means-tested benefits. Instead of a basic state pension of £107 a week, and a second state pension for those who had paid for it, and a means-tested pension credit, pensioners will now receive the flat rate pension instead.
Welcoming the plans, Local Campaigner Chris Ward said, “Under the old system, those who did the right thing by saving for their retirement often lost out in old age as they had some or all of their pension credit clawed back. This is unfair. Under the new system, everyone who has paid their National Insurance contributions throughout their working life, will be entitled to a pension of £144 a week at today’s prices. They will not lose out just because they have paid into a private pension. Pensioners without a private pension will not have to go cap in hand to the state for means-tested benefits to make ends meet. I am also pleased that two other groups will benefit significantly from this great reform. Women often take years out of work to look after children and as a result, under the old system, lose some pension entitlement because they have missed years of National Insurance Contributions (NICS). Under the new system, they will be credited for the years they take out for caring responsibilities and be entitled to the full flat rate pension. Also benefitting will be self-employed people who were previously not entitled to the state second pension. As long as they pay their NICs, they will be able to receive the full flat rate pension. We want to encourage people to set up their own businesses, so sorting out pensions to help the self-employed will help to achieve this”.
The Lib Dems in Government have also guaranteed that the State pension will now increases by whichever of the following is the highest: the average increase in pay; the retail prices index; or 2.5%. From April 2012, the state pension increased by its highest amount ever in cash terms – rising £5.31 to £107.46 a week for a single person (£8.49 to £171.84 for couples). Labour promised to restore the link to earnings throughout their 13 years in power. They never delivered on their promise. From April 2013, the state pension will be £650 a year higher than when Labour were in office.