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Reports and Briefing Notes

An assessment of the Government's options for state pension reform

In April 2011 the Government published a Green Paper: A state pension for the 21st century. In an attempt to address their concerns about the current state pension system, the Government has issued a Green Paper which consults on two broad options for reform of the state pension. The two suggested options for reform are:


  1. An acceleration of the existing reforms so that the state pension evolves into a two-tier flat-rate structure more quickly, with State Second Pension (S2P) accruals becoming flat-rate by 2020 instead of 2030.
  2. The creation of a single-tier flat-rate pension set above the current level of the Guarantee Credit element of Pension Credit (for example £140 per week in 2010 earnings terms) introduced for people reaching State Pension Age (SPA) after 2016, or the implementation date.


This report provides an independent assessment of the potential impact of the state pension reforms set out in the Government’s Green Paper. The research was sponsored by the National Association of Pension Funds (NAPF) who asked the PPI to consider the potential impact of the reforms on Government spending on pensions and on means-tested benefits, on the gainers and losers for the reforms, and on the potential wider impact on private pensions.


Chapter one explores the implications for individuals and for Government expenditure of maintaining the current state pension system.  

Chapter two summarises the analysis presented in the report and explores how the Government’s two alternative reform options compare to current policy and to each other.

Chapter three explores the implications for individuals and for Government expenditure of faster flat-rating of S2P.

Chapter four explores the implications for individuals and for Government expenditure of introducing a single-tier pension.



Executive Summary

Executive Summary

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