Universal state pension will inspire confidence among savers

The life and pensions provider claims this will enable savers to start providing for their future safe in the knowledge their savings will not be eroded in future years.

The move, announced by Iain Duncan Smith, would involve scrapping the state second pension and Friends Provident believes this would radically simplify the current state pension labyrinth system in the UK by removing the confusion often experienced by many over their exact entitlement, particularly those women who have had career breaks.

Trevor Matthews, Chief Executive Friends Provident, commented:

"Our industry has been crying out for a common sense approach to retirement planning and the universal pension proposed is a welcome step towards achieving this. The proposal should allow savers in the UK to take responsibility for funding their own financial future by giving a clearer indication of what they can expect at the point of retirement.

"There are of course still kinks to be ironed out regarding how this new universal amount will be funded but on the surface this seems like a genius plan."

Friends Provident believes a universal state pension could also, in the longer term, alleviate some of the retirement headache caused for women in the UK following the recent move to accelerate the state pension age.