The State Pension Reform

The State Pension Reform states that a new  flat rate pension of  £155 a week  for everyone reaching the official state retirement age, and having at least 35 years NI contributions will be  introduced to new pensioners from 2017.

Unless you're one of the ones that won't qualify.

The Key Points of the Flat Rate Pension:

  • A single, flat rate state pension payment set above the basic level of the means test, which is currently £142.70 – compared with a current basic state pension  and highly variable and unpredictable levels of additional state pension. The White Paper assumes £144 a week start rate, which is up-rated annually by the ‘triple lock’
  • An end to different Basic and Additional State Pensions, and contracting out of defined benefit pension schemes. Savings credit abolished.
  • 35 qualifying years to receive the full amount with over 80% of new pensioners achieving this by the 2040s.
  • A minimum number of qualifying years (up to 10 years) to get any single tier.
  • Self employed people brought fully into the state pension for the first time.
  • All state pension rights accrued under the old system will be recognised, so nobody will lose out on any pension they have earned.

The Current State Pension

Go to to see what the state pension for the current year is.   This is paid to those who qualify with at least 30 years NI contributions.

This amount can be increased if someone has paid into the SP2 (previously SERPS) or who gain through the savings element of the pension credit.

Anyone who does not qualify for a full state pension can apply for the means tested pension credit to top up the pension.

The current system is complex and there is evidence that thousands of pensioners do not claim pension credit and other benefits they may be entitled to because it is means tested or to difficult for them to understand.

The new system outlined in the state pension reform proposals will be a simpler system and should mean that fewer claimants will have to rely on means tested top-ups.

How the New State Pension Reform Will Affect Baby Boomers?

Baby boomer women who are not due to retire until the new system is implemented will benefit the most from the state pension reform. Many baby boomer women who took time out to care for their children or the elderly have not built up their full entitlement to the state pension.

Women who worked part-time or opted to pay the "married woman's stamp" were not able to build up their NI contributions to a full state pension, nor were they able to pay into SERPS which would have given them a top-up.

Under the new state pension reform it is proposed that the state pension for married couples will be scrapped and instead women will have the ability to build up their own entitlement. This means that a married couple could achieve a maximum state pension of £310 per week, £155. for the wife and £155. for the husband.

For those that have not built up 35 years of NI contributions by their retirement date the proposal is that part of the pension credit will still apply and there will continue to be a minimum weekly income for all. Claimants who will have to apply for it as they do now.

Self-employed people will be brought fully into the state pension for the first time.

SP2 Benefits

Integral to the single-tier reforms is the closure of the State Second Pension and, by extension, contracting out of the State Second Pension – the ability to give up entitlement in return for provision of at least a broadly similar Defined Benefit occupational pension.

This element of the reforms will play a significant role in simplifying the pension system, standardising both state pension provision and National Insurance contributions across

When the proposals were first unveiled it was unclear whether people who had paid into SP2 would benefit under the new state pension reform.

When the proposals were first released Steve Webb  promised that those who paid extra contributions into SERPS would not lose out. He said the new system would honour accrued payments to date so that many workers would receive more than the £155 flat rate.

He seems to have changed his mind on this now!

How the Changes Affect Company Pension Schemes

The new state pension reforms are likely to affect "final salary pension schemes" as these schemes will no longer benefit from discounted rates of NI contributions due to employees contracting out of S2P.

Final salary schemes are already in decline due to their growing costs and this will make them more expensive. It is likely that the proposed state pension reforms could spell the death knell for final salary pension schemes.

Who the New Rules Will Not Apply To

Baby boomers already receiving their state pension or those due to retire before 2016 will not benefit from the proposed flat rate pension of £155.

Even new pensioners will not qualify for the flat rate pension if they have at any time opted out of NI pension contributions when joining a private pension scheme.  This is usually a requirement of any Company Pension Schemes.

There are  also approximately 12 million existing pensioners who will not benefit from the new system. Michelle Mitchell at Age UK says: "Government must not turn its back on the 1.8 million pensioners living in proverty. More needs to be done to get vital benefits to those who need it."

Deferring Retirement

Deferring your retirement until after the new system comes into effect will not qualify you for the new flat rate state pension.  Your pension entitlement will be worked out on your date of birth.

Only those who reach retirement age after the single-tier pension is introduced on April 6, 2016 will qualify for the new £155 a week payout if they meet the criteria . If you get less today, you will keep getting less.

This is where the system seems completely unfair.

For example, a man who turns 65 on April 5, 2016, and who has worked all his life is likely to get about £118 state pension payout.

But had the same person been born the following day, their state pension would be £37 a week more.

Over 25 years of retirement he will have missed out on £48,100.

To compound matters, anyone who hits state pension age (currently roughly 61 and five months for women and 65 for men) between April 6 this year and April 5, 2016, will have a double blow.

Not only will they fail to get the higher pension, but they will be victims of the so-called Granny Tax the higher tax-free allowances that over 65s currently get.

The Pension debate is now closed but you can still read the comments of babyboomers below who felt strongly about the changes.

What Other Visitors Have To Say About the New Pension Reforms.

Click below to see what fellow baby boomers think about the new flat rate pension. All the responses here are from other visitors to this page.

Ex"My thoughts on Pension Proposals" 
I have written to David Cameron by e-mail on this topic 3 times. E- mails acknowledged ,passed to relevant Department and then totally ignored. I am …

Sadly, our Government really doesn't care... 
Born at the wrong time, 08/04/1952, and female. I calculate the Government, whose wages we pay to look after us and our country (and are making a rubbish …

ex "My thoughts on pension Proposals" 
These changes are all very well but will they help those already drawing pensions. I have 20 years full stamps paid and about 12 years married woman's …

My Thoughts on Pension Reform 
My name is Sharol Rasmussen and I live in the state of MO, in the U.S. Perhaps, some of you, friends from England, have come to visit our shores. …

My thoughts on the pension proposals 
It is clear that those who contributed to the state earnings related pension (SERPS)are to lose out. Prior to this new system we would have had the …

Pension Proposals Grossly Unfair 
My wife worked as a teacher and then ran her own nursery school for many years. She is now 64. On approaching retirement age she was given an estimate …

The Forgotten Pensioners 
As is the norm for politicians especially Steve Webb and Iain Duncan Smith it seems. The frozen pensioners are left feeling even colder now. All does not …

Your Comments on State Pension Reform Proposals 
How on earth can a two tier pension system be allowed to go through. Its grossly unfair. Ageist and,Discriminating. We must all stick together, to …

State Pension Reform Comments 
Having found myself a few years ago to be one year short of the requisite 39 years of NI contributions I paid a years contribution as a lump sum only to …

Read the Views of Babyboomers on Proposed Flat Rate Pension  
In principle I think it is fair to implement a single payment PROVIDED IT IS FOR ALL PENSIONERS! How can it be fair to exclude existing pensioners? Creating …

Babyboomer Pensioners Sold Down the River! Not rated yet
The Government tells us that because we're all living longer they have to raise the age of retirement. For Women is this particularly detrimental. The …

My U.S, Pension Nightmare Not rated yet
Hi fellow Boomers. My name is Sharol, from the U.S. again, wishing you well. I wanted to respond to Kim's opinion of the U.K. pension system. I …

My thoughts on Pension Proposals Not rated yet
I have just read unending posts on Citywire regarding the "freeze" on the SP for pensioners living abroad that included a long debate as to whether the …

My thoughts on pension proposals Not rated yet
I was born in october 1953 and will have to wait until july 2018 when I will be over 65 years of age to receive anything at all. Someone born just a …

The new reality of Pension Proposals Not rated yet
My name is Sharol, and I'm a retired teacher from the USA. We here, in the good old USA are suffering the same way you are in England. They keep taking …

Babyboomers thoughts on the new pension proposals Not rated yet
I am female and my date of birth is 16/08/1952. I have had my pension date deferred by approx. 2.5 years losing approximately £15000. I understand I will …

Babyboomers say No to New Pension Rules Not rated yet
So the proposal is that if you have not contributed you get nothing. Despite me working and contributing for 45 years. My wife, who is 2 years older …

Many early retirees will get less than those claiming benefits Not rated yet
Many people in their fifties and early sixties have already retired having made sure they have a 30 year contribution record, are not making any present …

Is the EU driving the Pension Changes? Not rated yet
Could someone please explain to me how any British government can have the sheer audacity to announce a new flat rate state pension for all except those …

More Comments on the State Pension Reform Proposals Not rated yet
Yes - all pensioners should get the new flat rate pension. However, in return, the retirement age should be raised to 67/ 68 immediately. Further, …

Women's State Pension at 60 Entitlement not Benefit Not rated yet
There has been a lot of talk by politicians about raising the state pension age for women. The Coalition Agreement was that the state pension age would …

The Flat Rate State Pension Reform Proposals Debate Continued/ Not rated yet
Please read, publicise and link to this petition below. Thank you. Keep the State Pension age at 60 for women and …

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