A single-tier State Pension

Last week saw the publication of the long awaited White Paper on State Pension reform. This sets out plans for a single-tier State Pension of around £144 a week for people reaching State Pension age in the future (probably from April 2017 onwards). The reforms aim to create a simpler system, reducing the need for means-testing and making planning for retirement easier. They are also intended to produce a fairer system with a better State Pension for those who have had years of low earnings and caring responsibilities.

200x160_moneyAge UK supports these aims and we have welcomed the reforms as an important step forward for future pensioners. However we are aware that there are criticisms. In particular many older people with State Pensions of less than £144 are angry that they will not benefit.

We also know that there are concerns for future pensioners – for example some current workers will have to pay higher National Insurance and some including higher earners could receive a lower pension than they would have done under the current system. Also, although some time in the future everyone who has 35 years of contributions or credits will receive the full single-tier pension of £144, during a fairly lengthy transitional period this will not be the case. Some people will receive more because in 2017 they will have already built up a State Pension (basic and additional) of more than £144.  Others will receive less than £144 because of time paying lower NI contributions when they were contracted out of the additional pension.

Age UK will be looking further at the details of the proposed changes and we will certainly be pressing hard for improvements for those already retired. We know that there is much more that needs to be done and we also know that some of the improvements we want to see are likely to be rejected on the grounds of costs. However even if the reforms will not result in an ideal State Pension system, we still believe they are important as a way of moving towards a better system.

 Find out what the State Pension reform changes mean for you

Read our State Pension reform policy briefing

45 thoughts on “A single-tier State Pension”

  1. I have rarely seen a new policy that is so divisive. Keeping all existing pensioners and those retiring up until 2017 on the old complicated and “unfair” pension system is no improvement for them whatsoever. There are also half a million pensioners who have paid exactly the same into the National Insurance Fund have their pensions frozen and do not receive annual upratings simply because they live in mainly Commonwealth countries. The proposed new system will run alongside the old system, so it will continue to be an overall complicated system for decades to come. As an example the last pensioner receiving a pension from the US Civil War was in 2004. If an elderly pensioner marries a younger spouse, their pension can continue to be paid for decades.

    I feel a new system should be fair to everyone and all pensioners should be “passported” to a new fair system instead of having a 3 tier pension system.

  2. Most unfair of all this is that some of the women hit by the second accelerated pension age rise, who have worked from 15 years of age will be paying in 51 years of contributions for the same pension others will receive for only paying in 35 years. Also the new changes mention that 10 years notice will be given of any pension age rise in the future, The women born 1953/1954/1955 had less than 10 years notice and have been discriminated against once more having had too little time to adjust their retirement plans. I hope these women are not being forgotten about by Age UK, they were the very first hit by the government’s unfair benefit cuts plans, even though the election manifesto promised no pension age rise before 2020, the law passed obscenely quickly and they are left in their late 50s with their retirement plans in ruins.

  3. I agree with Kattaddorra, it’s another blow to those of us in our late fifties. having already had to contend with two state pension age hikes, the second of which was surely barely legal in the way it was rushed through giving us only 6-7 years notice of having to work and juggle our finances for another 18 months.Now some of us have to worry if we have enough qualifying years while the govt airily advise us to cough up and buy extra qualifying years, though they don’t explain where they think we will get the money to do this. And here we have this new wonder pension and the assurance that there will be no more SPA rises without 10 years notice. So how come there was around 15 for the first rise and we’re promised 10 for any future rises and yet we were expected to accept the second extension of our working lives being thrust on us at short notice despite the coalition promise NOT to do just that very thing? I fear the single tier state pension is just yet another government scam, there’ll be no advantage for us IF we ever actually finally get to pension age, we’re not “all in it together” by any means, in fact some of us have been shoved in it and had our faces rubbed thoroughly in it while others do very nicely thank you.

    1. Yes totally agree Barbara. This Government make promises they have no intention of keeping. The following is an extract taken from the Coalition’s document “The Coalition: Our Programme for Government”:

      “We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women. We will end the rules requiring compulsory annuitisation at 75”.

      I am aware that you actively campaigned against these changes as did Age UK. However, I like many others believe that it’s never too late to effect change and consequently I have started an e-petition asking for the changes to be reversed- basically asking this Government to honour their word.

      I have contacted Age UK asking for them to launch a campaign against these changes but have yet to receive a reply. However, Dr. Ros Altman (Saga) actually Tweeted the link to my petition

  4. I am one of those women your refer to above Kattaddorra, having been born in 1955. So not only do I have to work until I’m 66 (which will mean I will have paid 48 years full time NI contributions) I will have worked an extra 13 years to get the same single tier pension. Discrimination on 2 fronts methinks!

  5. Those of us who are already pensioners have good cause to feel they have been duped by the government. Firstly most of us had to complete 40 years of N.I. contributions to qualify for a full pension. Secondly out of distrust for governments looking out for the aged many of us built up our savings. Never easy as theres always a reason to spend every penny. In my case I gave up smoking, drank only about 100 units per year, and never blew the budget with holidays. We were always taught to put away savings first, put them out of mind, then design your lifestyle around the remainder. This meant you didn’t need to dib into them. This current government advocates the pension revision will encourage people to save because future savers will no longer be subject to means testing to receive £144. Existing pensioners however will be subject to the old rules so in our case those of us who already did the responsible thing and saved throughout our lives will receive a maximum pension of £107. In other words for having already done what the government say they would like people to do we (the frugal) get three quarters of the pension that we could have received had we been spendthrifts and like mugs we paid in for 40 years not 30 or 35 for the pleasure.
    It’s a clever move knowing existing pensioners will have less strength and resources to fight back, We rely on you Age UK.

  6. I agree with the reservations in this blog and in the comments above. I first heard about the £144 pension when Ian Duncan- Smith spoke at the Age UK conference a few years ago. Even then it sounded to good to be true. Subsequently the implementation date has been put back and the current generation of pensioners have been left out alltogether. Now there is much softening up talk about Old Age Allowances being sacrificed to pay for this more generous treatment. That is why on my “GrumbleSmiles” blog I called it ” The £144 Pension Illusion”.

  7. It is a fact that many women of my age group will have paid contributions for 51 years before they can claim their pension. We have been given only 7 years notice of a second increase in our retirement age, when the Government agree that 10 years notice is required and indeed granted to everyone else. Nothing about the pension review is fair. It is badly thought out and will cause endless problems and be far more complicated than at present. I think that they have created a 4 tier pension system with women born 53/54/55 at the bottom. Discriminated against from the start. Made to work on in jobs they may no longer be able to do. Unable to find alternative employment and denied the pension they are entitled to.
    Of course a bigger state pension is to be welcomed but this policy will cause resentment and division for years to come. Fairness this Government need to look up the meaning of the word.

    1. I have not heard one politician, of any persuasion, speak out on behalf of women born in these years who have lost out twice-and lost out to the tune of nearly £50000. It suits them all to save money and we are the unfortunate target. The improved pension rate, when we ever get it, in no way will ever provide recompense for what we have lost and that is before you consider the hardship felt during those “pension-less” years.
      The first politician with the integrity to make a stance over this issue is the one who will get my vote—-but I’ll not hold my breath!

      1. Well said Sheila. I daresay we’ll hear from them all come election time. Whoever repeals this unjust and unnecessary law will get hundreds of thousands of votes.

        On a very positive note the petition now stands at 10,372. It has gained thousands of signatures in a matter of weeks. It looks like people are being to make a stand to show this government that enough is enough and that we will not tolerate their lies and deceit any longer.

        I do hope people sign and continue to share.


  8. i would like to know what is going to happen to pension credit. if we are all to get the same amount, what happens re claiming/receiving housing benefit and council tax benefit? i get £142.70 a week which includes about £30 pension credit (not sure of actual amount).as such i get my rent and council tax paid. will we have to pay all these in future if we are all going to get the same amount… ???

      1. @ Age UK – I am not so sure that Pension Credit will continue. The flat rate pension is supposed to roll up the state pension, pension credit and SERPS, S2P, etc. into one entitlement. The Pension Credit will continue for people who reach retirement age before April 2017 but don’t hold you breath afterwards.

      2. @pierrepierpont we can only comment on what’s been announced so far – which is that it will continue. Whether it changes thereafter is impossible to predict

  9. It’s pointless believing anything the government promise anyway as they just do as they please, they rob hard working people of money and freedom, if they get back in in 2015 we may as well all resign ourselves to poverty, existing pensioners AND future pensioners too (if the poor souls ever reach pension age that is)
    Ruth aka Kattaddorra

  10. still doesn’t say how housing benefit and council tax benefit will be worked out for new pensioners. if all get same amount. but then neither does it tell you what will happen to those who dont have any stamps so dont qualify for state pension. it simply says they get nothing or if accumulated SOME stamps ,will get SOME pension but reduced amount.
    its all such a mess, for all low paid, unemployed, ill ,sick and now pensioners. often thought of how would i die but never thought starvation would be in the list though at 70 I’m an older pensioner so up to press it wont affect me (though it does affect my thoughts for others plus nearer home as members of my family come into one or other of the other categories) bet there’s not many who hasn’t got at least one member of their family these reforms are affecting badly.

  11. I have just made a comment in the Mirror and the article contains a quote from Dr Ros Altmann who ignores the frozen pensioner yet again and AgeUK should be making this known when dealing with any pension issue.
    This affects those that are yet to become pensioners so let’s tell them about it.

  12. my husband receives a higher pension than the £144 that this government want to bring in. so in fact they are reducing the pension for people who have worked hard all their lives, or am i being a little simple in my thoughts?

  13. I’m 65 and 1/2 and receive state pension and pension credit which is more than the £144 promised after 2017 but I fully expect this government IF they get elected in 2015 will scrap the Winter Fuel Allowance, bus passes etc for existing and for new pensioners and with the cost of living rising existing pensioners will be as badly off as new ones. The truth is that we older people who have worked long hours and all our lives are being made to feel a burden on young people. In today’s news youth unemployment is up again, well who can wonder when jobs are tied up with older people forced to work even in poor health. More sense would have been ALL men and women who want to, to retire at 60, we’ve paid in more than the 35 years contributions by then, surely that would free up jobs for young people and enable them to start saving for a pension so they don’t have to work until they drop, which is the fate of the women in their late 50s now! I recently met up with 5 women my age and not a single one of us would have the strength and energy to have worked until now.The government are cruel to expect anyone to do so, especially in hard manual jobs. Women in their late 50s are being discriminated against and someone with clout needs to point that out to the government.

    1. That is so true Ruth. With people being forced to work longer where are the jobs for the younger generation going to come from? I have worked hard and paid my contributions in good faith. I have had my pension age increased twice. I am in a hard manual job and have age related problems.I will not be able to continue in this job until 65, and will be looking for another job along with thousands of young people. What chance will I have? However I have been assured by a Government Minister that I will be entitled to claim Job Seekers Allowance. That means they will be saving approx £70 a week by denying me my pension. A higher pension is to be welcomed but at the same time they are robbing thousands of pounds from hard working women.The Government has no Idea what its like for working people, they have their fat pensions to look forward to.

  14. well said Ruth. i have long time now been trying to understand why the powers that be insist in making older people work for longer when there are no jobs for those leaving school or with young families.
    its a right to use what God gave us to produce children but to me it seems people who do are being got at. subtly. it is right that kids leaving school should expect to take up apprenticeships and be taught on the job by those ready for retiring. its another form of evolution. the oldie retires so there’s a job for the youngster when his apprenticeship ends.
    as you say too ppl over a certain age dont have the same physical strength . its a well known fact that we all start to slow down from the age of 45 approx. at 60-65 we are well slowed down/ and some of us starting to accumulate medical conditions on top. so how do they expect older ppl to work efficiently and quickly? ridiculous. maybe they planning on using whips to get more out of us. as in the old chain gangs etc.

  15. I am 60 and one fo the 430 000 women losing out to men of the exact same date of birth as me and other females1952-53 no equality
    no other pension due to low pay and caring have currently 42 year on conts/credits NI
    and have am having to wait due to equalisation
    Just the sort of women SWebb and Givt says he wants to help and be fair to and his dept says it wants to stop gender inequality
    oooooh not the case Steve I am very distressed at injustice

  16. I was born June 1953 and have had my pension date moved twice now it looks like I will miss out as my new retirement age is March 2017, does that mean that if the new flat rate comes into play April 2017 i will
    be worse off

    1. Yes im afraid you will gillian. i was also born in 1953 and have a pension date of March 2017 so I telephoned the pension office with the exact same question that you are asking. I was informed that I would be evaluated under the old scheme of £107 basic pension and even if I wanted to work longer than the qualifying single tier pension in April 2017 I would still just be entitled to my March 2017 entitlement. So no joy for us then. Not only have we had our pension age increased twice but we miss out on a difference of over £30 per week for qualifying a month earlier than the coalition guidelines. I think it unfair, not only for us, but for all pensioners. If the government want a single tier system it should be for every pensioner past and present. After all, they say it will be easier to work out but they still have the administration costs to calculate the ongoing benefits etc for those qualifying before the April 2017 deadline. We can only hope that enough of a fuss will be kicked up and they change the guidelines for all. I for one will certainly be contacting my local MP to make my opinion known.

  17. I do not think these ‘reforms’ are going to make every body happy. But then it is not possible to satisfy every body and there are genuine that people are enamored by the so called simplicity of these pension reforms.But in the longer I feel, these reforms do have the potential to be widely accepted by every body. Though old system was discriminatory, but for people to move from one to another and when they have to make unnecessary sacrifices then it comes very tough for any body to say good things about this reform.

  18. I would hope that Steve Webb, Nick Clegg and David Cameron get their comfy seats kicked from under them at the next election. It’s just a pity that they have given themselves such a handsome pension and then deny others the fairness and justice that they deserve and have paid for over a lifetime rather than a couple of years work with wonderful allowances.
    MP’s should remember the people that they represent without favour.

  19. But Vinnie, the sore point about these reforms is that the discriminatory injustices of the current system still remain after 2017. We were initially told that the new basic pension would be £144, and all additional pensions would be paid on top. Not so. The first £37 of Serps/S2P and/or Contracted-out pension will take the place of the otherwise gratis uprating from £107 to £144. This is the £37 of pension that people have paid for in higher hypothecated NI contributions or higher occupational pension contributions, and which will effectively be confiscated in an act of state sanctioned theft. There’s no point to paying for a £37 additional pension, because the new £144 Single Tier pension will be paid anyway.
    There will be many (whose interests Age UK would claim to look out for) who will fall foul of these new rules which in no way redress the unfairness. It would be interesting to hear Age UK’s official policy on this.

  20. One problem there Sheila, Steve Webb is facing the wrong way !
    Pity he does not have the ability to fix the old one but introduces a new one just to confuse the pension situation even more than it already is. The attitude seems to be – to hell with the existing pensioners and bad policies.

  21. As others have said, those in their fifties and early sixties who have already retired beofre state pension age having made sure they have a 30 year contribution record, now find themselves short of the 35 year requirement.

    Whilst I accept that they will get a larger sum than would have been the case under the old system, there is still an unfairness in that anyone of a similar age and with a similar contribution record who is presently out of work and claiming benefits will be getting NI credits which will put them comfortably over the 35 year hurdle by the time they reach retirement age.

    How can it be fair that those who have left work believing in good faith that they had secured their full state pension, and who are presently no burden on the state (and might actually be paying a lot of tax) see their unemployed contemporaries end up with a higher state pension?

    The solution would be to bring in credits for the first decade or so that the single tier pension is in force, to cover the years covering the last five birthdays before retirement age for those who have been caught in this trap. After the mid-2020s (when those presently in their fifties have all reached state pension age) adequate notice of the new requirement will have been given to all potential early retirees and the concession could then be withdrawn.

    Anything less than this is unfair to those who are presently being told that they will have to dig deep into their own pockets to buy additional years after they have acted in a wholly responsible way. In many cases these will be people who have retired early on modest incomes for any number of reasons, including poor health, but they have nevertheless made what they thought was proper provision for themselves without intending to make any claim on the state prior to drawing their pension. They now see the prospect of others who have not done this – for whatever reason – .getting preferential treatment.

  22. Four issues, firstly, my husband who has worked since age 16,with one or two small gaps only, so at age 66, will have around 48 years or more of NI contributions. Secondly: I have reduced contributions of over 10 years owing to health problems for some years, elderly and infirm relatives to care for (now all deceased). Thirdly, I was planning to switch some of my husbands contributions to my pension, but now will not be able to do so. Forth, I am in my 50’s and have a few more years yet to reach 66, and so am faced with having to find money for these years to increase my NI.

    I do not hold any hopes out of gaining employment in the future, as there is none, not even for young people, let alone people with my age with health problems and a disability. I went somewhat deaf a few years ago, and doctor put this down to age!

    How does this government expect people like me to have to find the money to top up my NI, and even if I could find the money then I still do not have enough time to make up all the shortfall, so will now never get the full flat rate pension. I have been reading lately that letters are regularly sent out informing people if they have NI shortfall, well, I have never received any letter.

    I have read recently elsewhere of a lady in a very similar position to me and in my age group (over 50’s) and I am sure there are many more like me, who feel this new scheme affects us detrimentally. What would be fair would be for the government to stop taking NI from people who have reached the 35 requirment. In my case, this would free up some money to aid me to top up my missing years of NI and for future years.

    1. I don’t think your plan to switch some of your husband’s NI contributions was ever a starter. I have not heard of anyone being able to do that. If you have never received a letter to tell you that you would be short of NI contributions yourself, you may be able to use that as a reason to pay additional years contributions. It does not cost that much per year – just several hundred pounds, and the payback is very good.

      1. you talk about several hundred pounds as if its a mere drop in the ocean pierrepierpont… I for one would have a job on to find an extra 100quid let alone several.specially now with everything at an all time high.

  23. Don’t forget the Expat pensioners living in Australia, South Africa, Canada (the ‘frozen’ countries)etc. who never get a cost of living increase as pensioners in the UK, the rest of the EU, Pakistan, USA etc do regardless of the fact that they’ve also paid their level of NI contributions. Once the ‘frozen’ pensioners start drawing a UK state pension it remains at that level for life. The only exceptions being that if they move to, or visit for more than 2 weeks, an ‘unfrozen’ country the pension is uprated for as long as they remain there.
    There was an interesting case recently in the UK courts where the judges decreed that the ‘cost of doing the right thing’ (or words to that effect) is not a legitimate reason to not do it!

  24. No-one seems to have mentioned the group of women born between April 1951 and April 1953 (about 70,000 of us according to ‘Money Box’) who will receive a lower pension that those of our male contemporaries born on the same date as us, who will qualify for the higher pension. Discrimation or what !!!

    1. The changes to the State Pension Law are discriminatory. I was 60 last week. Instead of retiring, like I’d planned and contributed to all of my working life, I’m still working. This Government are forcing me to work until I’m 64. It appears I’m one of the lucky ones as others, my sister included, have to work until their 68 and older! If you look at this realistically this Tory led government is in breach of contract. Read some of the comments left by those who have signed a petition I have created and you will see first hand what devastation these changes have had upon hundreds of thousands of us.

      My son, David, posted this on Thursday 27th June – the day before my birthday.

      “My Mum turns 60 tomorrow. As well as turning 60, my Mum should have been retiring, as should have tens of thousands of others as they reached what was the standard age to do so. But now, she can’t. The plans my Mum and Mark had made for years, centred around her retirement, have been disregarded by a government who have reneged on their pre-election promises to not change the existing retirement age until at least 2016 for men and 2020 for women, at which point the changes were supposed to be phased in. Instead, they’ve brought it forward with a virtual shrug of the shoulders and an attitude which makes no references to what they earlier committed to not doing.

      My Ma has worked her adult life for her retirement and just 18 months before she was due to enjoy what she deserves, that was snatched away from her by a minority of people who see fit to destroy plans, lives and the happiness of millions for an idealism that benefits the few. The NHS is knackered, key public sector services are rapidly being scrapped and/or privatised whilst much needed public funding is being wasted on non-essential, elitist guff. And what’s part-funding such activity? The millions upon millions of pounds invested over decades by a generation, rightfully theirs, but now out of reach until their working lives are uncontrollably extended. Not to mention the soon-to-be-introduced flat pension rate being quietly pushed through with the help of hyperbolic media, which in fact will penalise millions of people and simply remove a massive proportion of a pension which is rightfully theirs. Nobody will be better off and those who have worked for a comfortable retirement will be worse off. Reckon the b******s in power will be claiming a flat-rate pension when they’ve been shuffled out of their job-for-the-boys position?

      So, can I ask you to please sign this petition and be one of hopefully a high number of people who want to make a stand, make a difference and make it known that people power still matters. This may not affect you today, tomorrow or in the next few years but it will affect your elder friends and family. One day, if the government continue to flagrantly change laws with no regard for the vast majority of this country’s working citizens, it will affect you. We put up with too much s*** from those who are supposedly in place to look after our welfare, when in fact they seem to be doing just the opposite”. : http://you.38degrees.org.uk/p/statepensionlaw

      1. Thanks! If everyone affected by these discriminatory changes were to sign the petition then this Government would be forced to do a u-turn. I really cannot understand the apathy. However, my petition is slowly but surely gaining momentum!

      2. I, like you turned 60 a couple of weeks ago and have been caught in the trap of the Tories bringing the age forward well in advance of what had been originally promised. I’ve signed the petition and also forwarded it to my friends. Good luck but i have my doubts about a reversal now that it has been established. There must be some loophole somewhere which makes it legally, if not morally wrong, to make people work to this ungodly age. Personally, I think the politicians know people will be unable to carry on working and this would force them to go and apply for other benefits, eg, income support and DLA which is virtually impossible to get nowadays.

  25. May I also add to my opinion in the previous post I did not just sign it for myself but for the generations to follow. As David stated earlier its about time out politicians found out that they cannot just put forward laws to suit themselves whenever they feel like and disregard the electorate. You saw what happened in Greece and other countries with the violent demonstrations when their government tried to do much about the same thing and rest assured that will happen here eventually. “Or are we too civilised”? Probably and it is the public who pay – not the politicians.

  26. Sanctioning off benefits for the merest thing is massively growing. DLA replaced by PIP with long waiting times. All benefits being made complex and hard to get more and more.

    My petition is not just about the Pension Bill, but about the Flat Rate Pension that is not more but less or even nil food money in old age altogether, the loss of the higher age related tax allowance and no state pension for low paid workers at all.

    Millions of men and women are effected by the Single Tier Pension (anything but) from 2016.

    Signing it is important. Just as important is spreading the facts from the petition within your social media circle to inform women especially please. Thank you.

    There will be no benefit to rely on. Labour have said even if they win next year’s general election they will keep Tory policies on spending and be even harder on welfare reform, that effects pensioners as well.

    The raised retirement age means pensioner couples become liable for the Bedroom Tax, when MPs are paid around £20,100 second home allowance plus all the expenses for same.

    The raised retirement age is bogus anyway.

    The ring fenced NI Fund is full for decades, not needing a top up from tax. It cannot be used to pay off the national debt by law, as the NI Fund is not a tax and therefore cannot be used for general expenditure.

    The EU raised the retirement age because it emptied the pension funds from all sources in nations with debts to Europe. The UK has no European debt.

  27. I am already receiving my state pension, and am absolutely furious that I shall lose out when the new rate comes in. Surely this is discrimination at its worst, attacking the elderly?? Is there any hope some organisation will press for this to be proven an illegal act, by our ridiculous government??

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