Briefing: Simplifying the state pension

There certainly seems to be something to be said for keeping an effective minister in the same post. After two years and eight months in the job, Steve Webb is by far the longest-serving Pensions Minister since the post was created in 1998. And, as last week’s mid-term review showed, pensions is one area where the coalition has much to boast about: the ‘triple lock’, the Hutton review, raising the pension age, ending default retirement and compulsory annuitisation, and introducing automatic enrolment. And today, Webb has announced the government’s new ‘single tier’ state pension.

At the moment, the state pension system is fiendishly complex: there’s the basic state pension (currently £107.45 a week), the Guarantee Credit (which tops up income to £142.70 a week), the Savings Credit (up to £18.54 a week for those who have saved for retirement) and the state second pension (which is linked to earnings). But for those retiring from April 2017 onwards, these will all be replaced by one flat-rate state pension of around £144 a week (in today’s money – it’ll be uprated in line with earnings so will be more than £144 when it’s actually introduced in 2017).