Average state pension to increase thanks to new Bill

More people than ever before would be entitled to a full basic state pension as a result of measures included in the new Pensions Bill.

Thanks to reforms included in the Bill - having its second reading today - around three quarters of women would be entitled to a full basic state pension in 2010, compared to around 50 per cent if the system was not reformed. And by 2020 around 90 per cent of women would have a full entitlement.

By re-establishing the link with earnings and improving the state second pension, the Bill would ensure more money would get to pensioners in the future. By the 2050s, someone who contributed for most of their life through working or caring would be entitled to around £135 a week from state pensions in retirement - instead of between £90 and £100 without reform.

Secretary of State for Work and Pensions John Hutton said: "These radical proposals are set to dramatically alter the pensions landscape in the UK.

"This Bill would create a more generous, fairer state system that would become a bedrock, on which people can build up decent private provision. It would be of particular benefit to women and carers, who often lose out in the current system.

"When you add to this our proposals for a system of personal accounts - which would ensure that, for the first time, millions of workers would have access to a quality private pension scheme with a guaranteed employer contribution - the future's looking good for millions of savers."