A simpler, fairer Citizen’s Pension would provide a more secure guarantee against poverty in later life, and lift up to 10 million future pensioners off means tested benefits, according to the National Association of Pension Funds (NAPF).

In its final report on proposals to implement the new Citizen’s Pension regime, the NAPF said the new system would reduce pensioner poverty, provide a far simpler state pension system on which to build additional savings, and would be fairer to millions of women, carers and others who miss out under the current system.

Research carried out for the NAPF by MORI indicates public support for key aspects of the Citizen’s Pension, with four out of five Britons supporting the idea of equal pension payments for men and women, even where women have taken work breaks, or are working part-time on low salaries.

NAPF Chief Executive, Christine Farnish, said: “Since our original proposals for a Citizen’s Pension were published three years ago, the debate on pension reform has moved on significantly. The principle of a simple, adequate, first-tier state pension, available to all, has become the basis for a growing consensus among opinion formers in the pensions, political and academic arenas.

“Our research shows that these proposals chime closely with the pension priorities of consumers. People want a simpler, fairer system, which does not penalise women who have taken work breaks, and which does not subject millions of pensioners to means testing.

“The Citizen’s Pension meets these criteria, and makes the whole pensions landscape much clearer. The “deal” from the state is £109 a week. For anything above that, you have to save through a workplace pension or other savings arrangements. There would be an opportunity for government to look again at designing more effective incentives for such savings.” Today’s report addresses criticisms which have been made of the Citizen’s Pension – that it would be too costly, that removal of contracted out rebates would damage private pension saving, and that a residency criterion would be dangerous.

Cost - A Citizen’s Pension, introduced in 2010, would cost no more than the current state pension system, provided the money currently spent on the Basic State Pension, State Second Pension (including contracting out rebates) and Pension Credit was used. The future cost of raising the Citizen’s Pension in line with earnings could be addressed in different ways. For example, state pension age could be increased to 67 by 2030 with either an increase in National Insurance contributions of up to 1.5%, or a further increase in state pension age to 69 by 2040.

Contracting out - The removal of £3-4 billion of contracted out rebate money from final salary private sector pension schemes would allow those schemes to redesign benefits to offset the cost, and would enable hard-pressed employers to hand a tranche of their pension liabilities back to the state, reducing the ”liability overhang” in final salary schemes.

Residency qualification - Whilst some have expressed reservations about replacing NI contributions with a residency qualification as the basis for entitlement to a state pension, the report argues that both systems produce a similar end point, so it makes sense to choose the system which is simpler and more cost-effective – a move which would be in line with the principle of “better regulation”.

Today’s report suggests that a Citizen’s Pension would make tangible and affordable improvements to the retirement prospects of millions of Britons, and establish a sustainable pensions system for the 21st century.