The Government has announced that it will issue a Green Paper before the end of the year outlining a proposal to introduce a universal state pension of £140 per week.
Key issues of this are:
This proposal has come from Vince Cable, Lib-Dem Business Secretary and not from the DWP headed by Ian Duncan-Smith Conservative
This idea was part of the Lib Dem manifesto in 2010.
It will not come into effect until 2015, after the next general election.
There will not be a coalition manifesto so we do not know yet whether it will appear in the manifesto of any other party. So implementation may well depend on either the Lib-Dems winning outright power at the next election or the Lib-Dems being in a position to participate in another coalition.
At first site £140 per week may seem a big step forward, but is that a base figure for 2010 or is it the proposed value in 2015?
Some pensioners with SERPS and Graduated Pension already receive more than £140 per week. The Pension Credit will be £134 in 2011 and even with the minmum increase of 2.5% of basic state pension year on year will be more than £140 by 2015.
One thing we must be clear and adamant about - there must be no losers in this proposal. HMRC have stated that this proposal is roughly fiscally neutral with the money coming from scrapping the costly Pension Credit system which costs 10 times more per person to pay £54.10) than the basic state pension and entailss the employment of dozens of advisors in DWP, local councils and chairiteis to try to get people to claim.
