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Monday, 21 April 2014

Bid to overhaul pension sparks mixed reactions

PLANS to change the state pension to a flat-rate system have been met by mixed reactions in Barrow.

The government proposes to overhaul the state pension by introducing a single-tier system.

It plans to provide a universal payment of £144 a week – a figure calculated at today’s prices – for people who reach pensionable age after 2017 and have 35 years of National Insurance contributions.

People due to receive a state pension before April 2017 will not be affected.

Margie Arts, Barrow and Furness Pensioners’ Association secretary, described the reforms as “farcical”.

She said: “People are earning wages and paying National Insurance in anticipation of getting a pension and every time they’re moving the goalposts.

“When I was young, you could’ve expected that if you were industrious and paid into a company pension and got an amount of money together, you could retire at 55 – and now you’re 65.

“Ten more years, it’s just wrong.

“This is a personal opinion, but I think most of the pensioners I know would agree, to have a universal pension amount is a good idea, but the universal payment should be based on the decency threshold that the government have assessed at being £300 a week.”

The most somebody can presently get in a standard state pension is £107.45 a week.

But some also get the State Second Pension, or Serps – the earnings-related additional pension.

There is also the Pension Credit, with those who qualify guaranteed at least £142.70 a week for a single person and £217.90 for couples.

Rob Cairns, Barrow and District Credit Union chairman, said the reforms would make the system simpler, but added: “From the point of view of the credit union, this isn’t going to change the world and savings in places like credit unions are going to be more and more important to people during retirement. But another downside is if people haven’t paid National Insurance contributions for at least 10 years, they get nothing.

“Some people certainly aren’t going to benefit because the pensions are going to be paid from a smaller share of National Insurance, so hence you still you need to save and hopefully people will do it in Barrow Credit Union.”

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