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13 May 2013

Queen´s Speech Reveals Planned Pension Reforms

New government plans, outlined in the Queen´s speech, revealed that the retirement age is going to rise further as life expectancy increases. Another major change to British pension plans will see the introduction of a flat-rate state pension of about £155 per week as of April 2016, the Daily Telegraph reported.

The reforms will replace the current complex means-tested system and will put an end to the second state pension. The primary goal of the new rules is to provide people with a better understanding of what they will receive in retirement, to make the system fairer and to encourage saving for retirement, the Queen said in her speech.

The government plans to increase the retirement age to 67 between 2026 and 2028 and will raise it further after that, so that young people today can expect to retire when they reach 70.

Other measures predicted to reform the British pension system include the introduction of a Bereavement Support Payment, which would replace the current suite of bereavement benefits, as well as a clampdown on overseas pensioners claiming payments based on their spouse´s history, by putting an end to the married person´s pension. At present, spouses of British pensioners are entitled to claim up to £66 per week even if they have never been to Britain or have never paid any national insurance contributions.

Full details on the Pension Bill are to be presented later this year, the Daily Telegraph reported.

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