Government urged to change pension system

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Government urged to change pension system

The Pensions Policy Institute suggests that, whereas the level of pension a person receives is currently proportional to the National Insurance Contributions they make during their working lives, the government should institute a flat rate of £100 a week to provide a minimum standard of living,

This would particularly help women whose careers are disrupted by pregnancy and motherhood. Indeed, new research shows that women are retiring on just over half the amount of money on which men begin their pensions.

The institute also stresses that, under their system, future pensioners would have a clearer idea what to expect from the state when they retire, experience less confusion surrounding the various state pension schemes, and avoid the embarrassment of means testing.

Alison O'Connell, Director of the Pensions Policy Institute, says: "Pensioners don't like means testing because they have to explain why they don't have enough money".

Several other proposals have already been concocted, with the Adam Smith Institute proposing the raising of the pensions to 40 per cent of an average person's earnings, and increasing of the retirement age to 68.

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