Flat-rate pension

This term is being used more frequently as a result of reforms to the state pension being introduced by the coalition government in 2011. It is also known as the universal state pension.

In an attempt to simplify the pension system the idea is to pay all qualifying recipients of the state pension a flat-rate amount. Initially a figure of £140 was suggested but as the system is unlikely to be in place until 2015 or 2016 the government is considering increasing this amount to £155.

In 2011, the current basic state pension is £97.65 but as this can be topped up by pension credit to £132.60 a week, the new system will simplify the procedure allowing all pensioners who have paid the required National Insurance to receive a flat-rate amount.

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