Pensions 'will be based on NI paid'
The Government's planned flat-rate pension will not be universal but will be based on the number of years people have paid National Insurance (NI) contributions, the Pensions Minister has indicated.
Steve Webb said the new system would be based on "contributions and credits", in the way that the current system is.
But he added: "Years of earning and paying National Insurance will be treated the same as years at home with children under 12."
His comments come the day after Work and Pensions Secretary Iain Duncan Smith said the Government planned to reform the state pension system so that it was fit for the 21st century, easy to understand and rewards those who save.
The Government wants to introduce a flat-rate state pension, which would ensure people who save for their retirement are not worse off as a result of missing out on means-tested benefits.
The new system would also help women, who often do not receive a full state pension as a result of taking time out of work to look after children.
Under the current system people have to have paid NI contributions, or received credits, for 30 years in order to qualify for the full state handout.
Appearing before the Work and Pensions Select Committee, Mr Webb said: "One of the things I hear time and time again is 'Is it worth me saving?'. We want to be in a position where it pays to save."
He also confirmed that the reforms would only apply to future generations of pensioners, and not those who have already retired.
The Government has not said how much the flat rate pension would be paid at, but there is speculation that it would be around £140 a week, slightly above the £132.60 a week that single people currently receive through the basic state pension and means-tested pension credit.