The pension reform proposal recommended in May contained the biggest changes to the British pension system since 1946. The legislation includes a provision for a new national savings scheme and a provision to link raises in state pensions with wages instead of inflation by the year 2012 (See UK Issues Formal Pension Reform Proposal ).
The bill allows for the creation of a Delivery Authority to design the national savings scheme, according to BizWorld.
The news report also points out that provisions of the bill will make the pension system more fair to women. Under the legislation women will benefit from a cut in the number of working years needed to qualify for a full basic state pension. Prior to the new legislation men had to work for 44 years and women 39 years to build a full basic state pension, but under the new rules everyone will be eligible after 30 years in employment.
In addition, the bill provides that weekly credits will be introduced to recognize and reward caregiving in the same way as working, which means that almost 500,000 more women aged between 45 and 55 now will retire with full benefit, according to the news report. The government hopes that by 2025 more than 90% of women will be eligible for a full state pension, compared with just 30% now.
The bill will also raise the average state pension for women from Â£77 a week to Â£130.