Retirement
‘Staggering’ difference in state pension payouts revealed by DWP
The Department for Work and Pensions (DWP) said difference – which can amount to £10,000 a year – is down to the level of basic and additional state pension paid out under the present rules.
About 130,000 people get £7 or less a week and the same number of people get £230 or more a week, it said.
Pensions minister Steve Webb plans to replace the current system with a flat-rate pension for new retirees set above the means-testing level. It is thought pensioners will be given £140 a week regardless of circumstances.
A delayed white paper on the mechanics of the flat-rate pension is due to be released later this year.
It was originally scheduled for the spring, but Webb admitted in July the “scale, complexity and importance” of the project meant the paper’s release had been pushed back.
Webb blamed the current variation in payments on the complex web of regulations introduced under past administrations.
He said: “The range of state pension payouts at the moment is simply staggering. The current system is so complex it would baffle even Einstein. Worse, if people have no idea what they will get, they can’t make sure they have enough savings for their retirement.
“We can’t go on playing roulette with pensions. A flat-rate single-tier state pension will restore simplicity and give people certainty instead of chance. And it will provide a sure foundation for further saving.”
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