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Among all the Government’s plans to reform the Pension Bill, the most controversial by far, is the rising of the state pension age to 68 years. This way, the Government believes, there will no longer be the “trend” of relying on the payments that the state has to make to a person after “a life time” of work.

The change will consist not only in the fact that the pension age for women will rise first at 60 years in 2010 and then will rise again at the 65 years in 2020- which was already plan to happen. This is considered to be the proper measure as for the women to equal the men’s state pension age. Under the Pension Bill, there is going to be another rise, for both women and men that will make the state pension age to go up from 65 to 66 over a two period of time, from 2024 to 2026 and then rise for once more, starting 2034 and in the period of 2044 to 2046, the state pension age will get stable, growing until then from 67 up to 68.

Other changes that will take place will be related to the restoration of the link with earnings. As in the period of time passed until 1980, the pensions will be tied to the average rise in earnings among the working population, in 2012. Later, in 2015 though, the situation might change as the cost could be pushed back.
Some other new things is that by 2012 there will be a scheme of personal accounts especially made to help the employees who do not have the access to a good company scheme. This would mean that the workers will have to pay 4% from their earnings which will be a sum between £5,000 and £33,000 a year. Employees will have to pay a minimum contribution of 3 % and a tax relief of 1% will be added to that. The difference between the two categories is that employees will be able to opt out if they want to. More details on the matter will be published however in a White Paper in December.
The Bill also wants to increase the number of the people entitled to get a full pension.
Another important change is to happen with concern to the state second pension. This will become much simple than before, being in fact, a weekly added sum to the basic state pension. The transformation will begin at the same time with the link restoration and should be completed by 2030. Some tests are about to be made starting 2008 on the people with small earnings in order to reduce the difference between the two system, the existing one and the wanted one.
The last change but who knows if it’s the least, is that contracting out for money-purchase as opposed to final salary will be abolished. Also, there is going to be a rolling review in order to ease the burden on employers who provide consistent pensions due to a good occupational status.

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