Monday, June 30, 2014

Government misleads pensioners

Minister admits simple flat-rate state pension is neither simple nor flat-rate
Pensions minister,
Steve Webb has
revealed that he
had been “guilty of over-
simplifying” the new
single-tier state pension in order to emphasise its appeal.

In an interview with
the Daily Telegraph, Mr Webb explained that this autumn, more than a million people in their late fifties and early sixties will receive a
letter telling them they will receive less than the full £155 a week promised under the flat-rate state pension.An estimated 1.94m

people are expected to retire in the first five years of the new pension scheme; set to be introduced in April 2016, but at least one million will have their pensions reduced.
Anyone who contracted
out of the state second pension/SERPS
and into a company
scheme will be affected. Whilst it has always been the case that those contracting out of
the state scheme would get less from it when
they retired, many believed that after 2016, everyone would get the

new state pension of
£155 a week.
Under the old scheme, everyone received the
basic state pension
providing they had paid national insurance for
the required number of years, but now it seems each individual’s state
pension could be different -
depending on how
generous their occupational scheme might be.

Mr Webb admitted
that had this explana-
tion of how the scheme would work been made clear at the time people might have switched off”

He went onto say
Some people will get
more (than £155 a
week) and others less.”
Ron Douglas, NPC
president said: “It is
clear that the new so-
called simple, flat rate state pension is neither simple, nor flat-rate.”

The only thing we can be sure of is that the government has misled millions of future pensioners by suggesting that everyone would get
a state pension of at
least £155 a week.”
Figures suggest 80%
of future retirees won’t get the full amount

From the Campaign bulletin of the National Pensioners Convention

Cameron trying to count

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