Plans to introduce a new and simplified state pension have been hailed by Otley’s MP.
Greg Mulholland (Lib Dem, Leeds North West) says the single-tier pension, which will apply to anyone retiring after 2017, would play a vital part in delivering “a strong economy and a fairer society”.
The pension will be worth £144 a week – compared to the current £107.45 level – and will: l Be paid equally, for the first time, to men and women.
l Include, also for the first time, the self-employed.
l No longer penalise anyone who decides to bring up children or become a carer.
The Institute of Fiscal Studies, however, has warned that the long-term effect will be to reduce pensions for the “vast majority of people”.
Critics have also pointed out that today’s younger workers may have to keep working into their 70s before getting their pension, since the age at which people can start claiming is to be reviewed – and probably increased – during each five-year Parliament.
Mr Mulholland said: “The worrying fact is that, for many, the state pension is often not enough to live on.
“It’s also so complicated people working today don’t know what they will get in retirement, and it discourages them from putting anything aside.
“The single tier pension is a major step in recognising the right of people who work hard and save to have a decent and dignified retirement.
“People who have contributed, either through paid work or caring or in some other way, should be guaranteed a pension clear of the basic means-test, and one that gives them security in retirement.”
The age people can claim their state pension will rise to 66 in 2020, and to 67 in 2028.