Britain’s coalition government is working on the introduction of a flat rate state pension, business secretary Vince Cable said yesterday.
Cable gave no indication of the overall cost of the proposed reform, which aims to simplify the state pension system, reduce inequalities between men and women and encourage people to save for their pensions by eliminating means testing.
“This is a big idea that my colleague, the pensions minister Steve Webb, has been working on and indeed, we worked on it for years in opposition,” Cable told the BBC.
“It’s to make sure people can look forward in retirement to a good state pension without means testing. We need something people can rely on,” he said.
Cable’s comments were in response to a report claiming the proposal was that pensioners would receive a flat rate of £140 per week from the state, regardless of their wealth or how long they had worked. That would represent a significant increase in what individuals would receive compared with the current system.
News of the plan comes days after the government announced a four-year plan of draconian cuts to public spending to help reduce its deficit.
“This depends on the state of public finances as to how and when this is phased in,” Cable said.
City A.M. Reporter