Whilst I applaud the flat rate pension of more than £140 a week that Sir Iain Duncan-Smith has been working on with Steve Webb, his Lib-Dem minister for pensions, I also have to ask does it really go far enough?
Pensioners will receive a flat rate of pension, set above the pension credit rate, regardless of how long they worked or earned, this will ensure a basic level of income for all of our pensioners without the need for means testing. It will also encourage people to save because those who have saved will be better off.
But does it go far enough?
Now that there is no longer a link between how long you work and earn and the amount of pension you get, do we really need National Insurance?
Isn't N.I. now, many may argue it has been for a while, just another form of Income Tax?
And if so, surely it would be more efficient and cheaper to administrate, not to mention more honest, if we collected it like that?
We could save millions in administration costs by doing so, which could be used to relieve some of the pressure of cuts on the less well off.
Is it now time to scrap N.I. all together in favour of a single Income Tax?
I think so.
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