Work and pensions secretary Iain Duncan Smith has pledged to press on with the Government's reform of the state pension, which would see an end to means testing and the imposition of a £140-per-week flat payment.
The changes will mean that mothers who want to stay at home to care for their children will no longer lose out for missing national insurance contributions when they collect their pension.
Duncan Smith outlined the plans in a speech to charity leaders today (8 March) and it is understood that full plans could be unveiled in this year's Budget.
By ending means testing for pension top-ups, ministers also hope to encourage people to save for their retirement reassured by the fact that they will not lose out because of their caution.
The convoluted combination of pension payments and means-tested top-ups would be replaced with a single, uniform state pension of about £7,280 per year.
Currently, women are entitled to buy extra years of national insurance to supplement pension contributions. Generally this is six years' worth, but some can buy a further six if they already have 20 years under their belt and will reach state pension age before 5 April 2015.
Yet the gaps in stay-at-home mothers' work records mean that the average basic state pension for women currently stands at just £70.26 per week, compared with £83.74 for men. The average payment for women from the state second pension, or Serps, is just £15.50 per week, compared with the £28.71 paid to men.
Details of the contribution top-ups of women who are not at work have not yet been finalised. But there has been speculation that it is likely that years spent caring for children or elderly relatives would be counted in exactly the same way as being in work.
Plans for a radical reform of pensions reached deadlock at the end of last year after the Treasury voiced concerns over potential cost.
Saga's director-general, Dr Ros Altmann, welcomed the expected announcement. "After years of watching our pension system falling apart, it seems that Iain Duncan Smith may finally be getting to grips with the inadequacies of the UK state pension," she said. "There are two fundamental problems which may be addressed at last. Firstly, the current system discriminates against women [and] secondly, because of the reliance of mass means testing, our state pension system undermines private pension saving.
"One decent, flat-rate state pension that everyone could understand: this would be the best news for pensions in years," she added.
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