Queen delivers good news for future of state pension

Age UK has welcomed the changes to the state pension outlined in the Queen’s Speech earlier this month. The headline proposal is to introduce a flat-rate state pension of about £144 a week from April 2016. This replaces the current basic pension of £110 a week, plus various means-tested top-ups.

The Pensions Bill is designed to introduce reforms which will “make it clearer to people what they will get from the state when they retire, reduce means-testing and provide a firmer foundation for saving.” 

The legislation will also increase the state retirement age to 67 between 2026 and 2028, followed by future increases linked to life expectancy. 

Michelle Mitchell, charity director- general at Age UK, said: “The legislation announced in the Queen’s Speech has the potential to transform our crumbling and unfair social care system for current and future generations of older people, but to have any chance in succeeding we need to see the legislation twinned with a commitment in the spending review for increased spending on social care.

“Good care makes good sense. If older people get good quality care at home it helps them remain independent for much longer, helps keep them out of hospital and protects families from the pressures of caring.”

Pensions minister Steve Webb, the man behind the new bill, recently warned that people may need to keep working until they are 70 because of a shortage of workers. The MP said firms would need to get used to hiring older staff because, unlike overseas workers, Britain’s growing elderly population “already live here and their numbers are growing”.

“This is actually enabling people to carry on and, in most cases, that is good for their wellbeing,” he said. 

“Over time there will be a whole set of jobs where employers need experienced older workers and a firm that doesn’t change its attitude to older workers will be left behind.”

The government said Britain was running out of workers, with 13.5m vacancies predicted in the next decade but only 7m young people due to leave school and college. Ministers believe the gap can be filled by older people staying in the workplace for longer.