Two State Pension Change Options

Two State Pension Change Options.

The Government has proposed two options to reform the basic state pension - one option would be for the second state pension to move to a flat rate by 2020, with contracting out to continue for members of defined benefit schemes.  

Option 2 would be to move to a single-tier, flat rate state pension of around £140 a week, which would replace the current system, that combines the basic state pension with payments from Serps and the state second pension.  It would also end means-testing for pensions.

According to Steve Webb Pensions minister, the current state pension is too complex and confusing and makes it difficult to save for retirement and leaves millions of people relying on means tested support.  The new reforms will end the unfairness of the current system and will secure a simple, fair and decent state pension.

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