The government is giving hints of its plans for a flat rate old age pension to start in 2017. The Daily Telegraph reports this morning that the simplification of the system, producing a pension worth perhaps £155 a week, will mean that many working people will have to pay higher national insurance contributions.
Head of pensions research at Hargreaves Landsdowne, Tom McPhail talked to Today's presenter James Naughtie about the ramifications.
Mr McPhail explained: "If you are a member of a final salary pension scheme, then you are paying a lower rate of national insurance than everyone else. They are structured to replace an element of state pension. The expectation is, if the government scraps the current system, it will result in an increase of national insurance contributions for some."
He added: " Ultimately, there will be a move to a fairer, more even and simple system. The long term outcome will be much better for everybody, but getting from here to there will require a lot of readjustments. And there will be winners and losers."
Get in touch with Today via
or text us on 84844.