Retirement contributions fall by £342 a month

Retirees are saving less for their future. People are setting aside less cash to fund their twilight years. A fifth of British workers nearing retirement have cut their pension savings by an average £342 a month, a report from online insurer LV= has shown. The figure equates to a loss of £4,104 a year and £11 billion in total nationwide, which is double the fall in pension contributions recorded in 2009 and slightly higher than 2010 losses.

Universal pension rate announced

Details on the new universal pension rate have been revealed. Pension provision will be revamped as the government replaces the current system with a 'fairer' flat-rate pension. Plans to create a £140 flat-rate pension have been published in a new green paper. The proposed system, outlined in “A state pension for the 21st century”, will come into effect for new pensioners from 2014 at the earliest, according to expert predictions - those who are already receiving a pension will not be affected.

Universal pension may rise to £155 a week

The pension system is to be overhauled to make it simpler. Flat-rate pensions will be better for low earners and women who have taken time out of work to have children. A universal flat-rate pension of £155 a week may be revealed by pensions minister Steve Webb next week. Previous indications from the Work and Pensions Secretary Iain Duncan Smith outlined that the flat rate would stand at £140. However, with no changes set to be implemented for the next four years, the figure is likely to rise with inflation. Currently a single person receives a basic state pension of £97.65 a week and a couple receives £156.15. Extra benefits are provided to the poorest pensioners through a means-tested system. However, this aspect of pension provision will be scrapped to streamline the complex process.

Flat-rate pension confirmed in Budget

Universal pension rate is to become a reality. This week's Budget shows that the pension system will be revamped as planned. Proposals to introduce a £140-a-week universal flat-rate pension have been confirmed in Chancellor George Osborne's Budget. Plans to simplify the current system had been outlined by the government earlier this year, however an exact figure had never been specified. Mr Osborne said that the changes will take many years to implement fully and people who are receiving a pension already will not be affected. He did not reveal whether the flat-rate sum will rise in line with inflation.