Flat-rate Pensions Plan Revealed

Today details of the government's plans to introduce a flat-rate pension by 2017 (the equivalent of £144 a week in today's money) have emerged ahead of an official announcement next week.

Early indications show that both the self-employed and some women could benefit from the changes to pensions. Conversely some other workers will end up paying hundreds of pounds a year more in national insurance contributions. These will probably be the 1.4 million private sector staff who are enrolled in final salary schemes and currently contracted out.

The White Paper will be published next Monday, and we'll be on hand with a full analysis once the final details are published.

These proposals were originally published back in the spring of 2011. At the time the option of a universal flat-rate payment was seen as the biggest overhaul of the system for many decades.

Pensions expert Tom McPhail commented:

"We will ultimately move to a much simpler system - it'll be a more even system, fairer, everybody will get more closely aligned benefits"

"But we have a very complex system at the moment, so to get from here to there is going to require quite a lot of recalculations and adjustment, it'll be a lot of work, and there'll be some winners and losers from all of that."

Labour leader Ed Milliband said:

"The most important thing the government needs to do is come clean about what the implications of their pensions proposals are."

"We've supported the idea of a flat-rate pension but we need to see the detail - and frankly the detail shouldn't come from leaks to the newspapers, it should come from the promise the government's been repeatedly making that they'll publish their plans."

These changes could be one of the biggest shake-ups to the pension industry in many years. Keep an eye on the news next week and check back here for in-depth analysis and commentary from our experts.