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Minister calls for ‘single, simple, decent’ pensions

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Minister for pensions Steve Webb has applauded the creation of a “single, simple, decent state pension”.

At the Pensions Management Institute (PMI)'s spring conference in London yesterday, Webb welcomed the chancellor's Budget, confirming the Government would consult on options for reform, including a proposal for a flat-rate state pension, estimated to be worth around £140 a week.

Webb said the first step to building the foundation for a fairer pensions deal for all is to level the "rocky terrain" on which pensions policy in the UK sits. He explained that doing nothing about the complex pensions system runs the risk of auto-enrolment - "a big cultural shift" - not working.

He said: "The problem with pensions policy over the past decade is that it has suffered from what I call the curse of incrementalism, which has come about because of lots of individual decisions that have been made, all for the right reasons, but all going in different directions. There is no coherent sense of where we want to go. "It must be possible to do better than this. I want to see a single, simple, decent state pension that protects people from poverty and encourages effective saving for retirement."

Vince Linnane, chief executive of the PMI, added: "We welcome Steve Webb's comments about building a foundation for fairer and better pensions for everybody, especially with the launch of auto-enrolment and National Employment Savings Trust (NEST) on the near horizon.

"We are also pleased the minister is considering a number of other matters, including regulatory arbitrage, open market options and enhanced transfer values. We would encourage PMI members to get in touch if they have an opinion they would like to share on these matters. A consultation survey to members will be issued shortly."

Minister for pensions Steve Webb writes about the default retirement age in the April issue of HR magazine.