Proposals to introduce a single state pension and automatically link the state pension age to increases in longevity will now be published in the autumn, pensions minister Steve Webb revealed today.
The plans were originally expected to be published this summer, but in a written ministerial statement, Mr Webb said the delay was needed to ensure the reforms deliver a state pension system that is 'fit for the 21st century'.
'Given the scale, complexity and importance of these two significant reforms we are still working on the details, to ensure we get them right,' he said.
'Therefore, we will set out further detail on both the single tier reform and state pension age review mechanism in a white paper in the autumn.'
In his March Budget, Chancellor George Osborne indicated the single state pension was likely to be set at around £140 a week - above the basic level of the current means-tested pension.
Mr Webb said this new 'simple' flat-rate pension would 'bring much needed clarity and simplicity to the pension system, and provide the foundation needed to support automatic enrolment into workplace pensions, enabling people to save for their retirement with confidence'.
He confirmed that reforms would be introduced in the next Parliament and would not cost any more than the current system 'overall'.
Joanne Segars, chief executive of the National Association of Pension Funds, welcomed the confirmation of a timetable for reform but said the changes needed to be made as soon as possible.
'Our state pension is one of the most complicated and least generous in Europe,' she said. The proposals for a simpler, flat-rate foundation pension are critical to the success of auto-enrolment. People need to know that it pays to save for their old age, and that they won't see their savings means-tested away.
'The government's delay also means that pension schemes could be under more pressure to adapt to the new state pension. Defined benefit pension schemes need time to prepare for the end of contracting out. The government must give them enough time and give them clarity as a matter of urgency,' she added.
