TISA: The flat-rate state pension – not all it seems
Commenting on the confirmation that the forthcoming pension bill will contain the legislative basis for the move to a flat-rate basic state pension, Malcolm Small, Director of Policy at TISA says:
“We have always argued for a flat-rate basic state pension as it will bring to an end the complex system of means tested retirement income benefits and, by creating certainty, will provide a clear platform for people to save further.
“However, the treatment of those with long periods of contracted-out employment remains unclear. We have yet to see the vital factors for these calculations but it would appear that the intention is that these groups will receive a lower state pension. This is likely to be based on the fact that they paid a lower rate of National Insurance when contracted out, but it can also be argued that the rebates towards the end of the scheme were inadequate to compensate for the investment risk being carried. That risk was, and is, considerable, and government will need to be careful not to give the impression that doing the bidding of the past administrations of the day in taking the decision to contract out, results in financial penalisation later.”
Ends……
For further information, please contact:
Malcolm Small, Director of Policy, Mobile: 07989 500771
Email:malcolm.small@tisa.uk.com
Issued on behalf of TISA by Cauldron Consulting, contact Steve Radford – Tel: 020 7680 6568, Mobile: 07889 903786 Email: steve.radford@cauldron-consulting.com
Notes for Editors
The Tax Incentivised Savings Association (TISA)
TISA is the premier industry funded body in the UK retail savings and investment industry. By engaging with member firms, government, political parties, regulators and consumer groups TISA’s ultimate goal is always to further consumers’ best interests. It seeks to improve the range, features and quality of savings and investment schemes available whilst encouraging more people to save for their financial security and peace of mind.
Uniquely, TISA is able to articulate the opinions of the whole savings and investments marketplace through its membership comprising over 130 member firms involved in the supply or distribution of products. TISA’s remit extends across the broad spectrum of savings vehicles & services and centralised investment propositions.