Ros article on why state pension reform changes are broadly welcome.
CITYAM – 14 January 2013
The proposed changes to the state pension are broadly welcome. A decent, flat-rate state pension for all, above means-testing, will provide a firm foundation on which other later life income can be built. We must make it safe to save and to work longer, but mass means-testing in the current system undermines this. UItimately, anyone reaching state pension age will receive £144 a week (or the equivalent in tomorrow’s money) and that’s it. If they want more than that, they will have to do something about it themselves, either by saving more, working longer or finding other income. It does not make sense for the state to pay earnings-related state pensions. Higher earners should, in fact, be in a position to provide more for themselves than lower earners, so why should the state pay them more in retirement. The experiment with contracting-out has left a huge legacy of complexity and failure. In future, everyone should pay the same rate of National Insurance and be paid the same state pension.