Universal £140 Old age pension

[Trevbet]

How will this effect pensioners where currently a state pension is made up as follows:

50% Basic Pension
50% Pre 97 Additional State Pension ie serps.

[Graham-W]

factor30. The proposed changes to the pension rules to give a flat rate £140 per week was announced in 2010 and a Green Paper was published last year. The plans were confirmed in the most recent budget.
The Green Paper actually gives two options.
The first is to change new pensions to £140 pw for pensions starting after a certain date (not announced as yet, but 2015/2016 is expected).
The second option is to accelerate current increases to the basic state pension until it reaches £140pw by 2015/2016.
The first option would be the cheaper and second option more acceptable.
I wonder which option the government will choose. (What? Me? Cynical?)

[factor-fiction]

Exactly- Graham-W. This was in green Paper. Wikipedia defines a green paper as "a tentative government report of a proposal without any commitment to action; the first step in changing the law. Green papers may result in the production of a white paper."
I'm not sure there would be a huge cost difference. The cost of increase in state pensions to existing pensions would be offset (although not fully) by the removal of pension credit and an increase in tax receipts (from those who have a private pension too which when added to the new state pension gives a higher tax liability)

I'm not sure what the change is that will result in your loss of £35 a week, but if it is a true reduction I agree it could be a very big portion of your pension

[buildersmate]

I'd clocked that.
But what is surely new news is the proposed elimination of the earnings-related top-up? - Graduated Pension, then SERPS and more recently S2P.

[askyourgran]

It certainly gives people no incentive to work full time, pay your dues and have savings. I've been taxed all my adult life.

[ladybirder]

It will be most unfair IMO if SERPS is treated differently to a private pension. After all surely the only difference is that people paid extra to the goverment not to a private scheme. When the pension increases to £140 then SERPS or 2SP should be added to that figure. Anything else would really really be unfair.

[buildersmate]

This is what the Pensions Minister Steve Webb said in April 2011.

This redistributive move – "progressive is the word I prefer," says Webb – is unlikely to appeal to traditional Conservative voters, but Webb promises they will not lose the Serps and S2P benefits they have accrued. "I'm not taking any money away. We will honour everything that has been accrued to date."

Which would imply SERPS and S2P is on top of whatever tinkering gets done to the Basic State Pension.

If, however, the 'not taking away' means 'giving it to those currently non-entitled such they end up with the same as those who haven't had it taken away', I (for one) will be mightily non-plussed.

[LoftyLottie]

Me too builders mate, me too!!

Somehow I seem to have worked for most of my life and contributed for most of my life for no reward. Had I known, I may well have sat back and let the state take care of me.

(But having said that, I probably wouldn't, because I was not brought up in that culture) :o(

[factor-fiction]

The criticisms you mention, askyourgran, also apply to the current system. Those who made no provision for their retirement receive pension credit. Those like my MIL who saved hard out of a meagre income to get a small private pension find their pension credit is reduced by the same amount- so they wasted their money.
I think the proposed new scheme is better in that respect.