This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/money/2013/jul/11/younger-workers-lose-flat-rate-state-pension
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Younger workers set to lose out under flat rate state pension system | Younger workers set to lose out under flat rate state pension system |
| (2 months later) | |
| Anyone in their late twenties who is not self-employed for a large part of their career will be at least £1,000 a year worse off under the flat-rate state pension system, according to an in-depth study of the government's plans to simplify retirement benefits. | Anyone in their late twenties who is not self-employed for a large part of their career will be at least £1,000 a year worse off under the flat-rate state pension system, according to an in-depth study of the government's plans to simplify retirement benefits. |
| From 2016, the basic state pension and second state pension will be replaced by a flat rate payment worth about £144 a week. At the same time the number of years workers need to have made national insurance contributions will also change, and the couple's pension will be ditched in favour of individual payments. | From 2016, the basic state pension and second state pension will be replaced by a flat rate payment worth about £144 a week. At the same time the number of years workers need to have made national insurance contributions will also change, and the couple's pension will be ditched in favour of individual payments. |
| Analysis of the changes by the Institute for Fiscal Studies shows that 43% of those reaching state pension age in the four years after 6 April 2016 will be better off a result of the reforms, and that retirees will typically see a £2.74 uplift in their weekly income. | Analysis of the changes by the Institute for Fiscal Studies shows that 43% of those reaching state pension age in the four years after 6 April 2016 will be better off a result of the reforms, and that retirees will typically see a £2.74 uplift in their weekly income. |
| Women stand to gain the most, with 61% receiving bigger pensions and the average increase standing at £5.23. A third of men will benefit from a bigger pension, typically an extra £1.62 a week. | Women stand to gain the most, with 61% receiving bigger pensions and the average increase standing at £5.23. A third of men will benefit from a bigger pension, typically an extra £1.62 a week. |
| One in five people will see their pension fall, as currently a high earner who has made NI contributions for 49 years could draw £213 a week from the state. However, the IFS said most of these losses would be recouped later in retirement through a more generous annual increase in payments. | One in five people will see their pension fall, as currently a high earner who has made NI contributions for 49 years could draw £213 a week from the state. However, the IFS said most of these losses would be recouped later in retirement through a more generous annual increase in payments. |
| The story is very different among those who have much longer to go until retirement. The report said that for those born after 1986 "the reforms represent a reduction in state pension income for almost everyone". | The story is very different among those who have much longer to go until retirement. The report said that for those born after 1986 "the reforms represent a reduction in state pension income for almost everyone". |
| It said someone born in 1986 who spends 35 years in low-income jobs would receive nearly £1,000 a year less from the single-tier scheme than they currently would, and that among higher earners benefits from the state could fall by as much as £2,300 a year. | It said someone born in 1986 who spends 35 years in low-income jobs would receive nearly £1,000 a year less from the single-tier scheme than they currently would, and that among higher earners benefits from the state could fall by as much as £2,300 a year. |
| Only those who are self-employed look set to gain from the system, as they currently cannot benefit from the second state pension. | Only those who are self-employed look set to gain from the system, as they currently cannot benefit from the second state pension. |
| Soumaya Keynes, a research economist at the IFS and one of the authors of the report, said: "For most of those now in their twenties and thirties, although these reforms should make it easier to predict how much state pension income they will get, the reforms will also reduce the income they can expect to get. | Soumaya Keynes, a research economist at the IFS and one of the authors of the report, said: "For most of those now in their twenties and thirties, although these reforms should make it easier to predict how much state pension income they will get, the reforms will also reduce the income they can expect to get. |
| "They will need to save more privately for their retirement to make up for this." | "They will need to save more privately for their retirement to make up for this." |
| The pensions minister, Steve Webb, said he was pleased the report showed that the majority of people approaching retirement would get a higher state pension. | The pensions minister, Steve Webb, said he was pleased the report showed that the majority of people approaching retirement would get a higher state pension. |
| "I'm pleased this report recognises that the single tier pension will provide clarity for people about what they will get from the state when they retire, and boost the state pension income of people who have been disadvantaged by the current system, such as women, carers and the self-employed," he said. | "I'm pleased this report recognises that the single tier pension will provide clarity for people about what they will get from the state when they retire, and boost the state pension income of people who have been disadvantaged by the current system, such as women, carers and the self-employed," he said. |
| "Younger people will have the advantages of knowing they will get a simple, clear state pension, and when they are employed have the right to an occupational pension on top." | "Younger people will have the advantages of knowing they will get a simple, clear state pension, and when they are employed have the right to an occupational pension on top." |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |