Emma Simon looks at an idea for a new, flat-rate retirement wage for all and asks whether Westminster will ever adopt it

What is a citizen's pension?

The idea, first mooted by the Liberal Democrats, is for everyone, on retirement, to receive a flat-rate pension, regardless of their National Insurance (NI) contributions record and other pension income. The NAPF proposes a flat ?105 a week in today's prices - 30 per cent more than the present basic state pension - and restoration of the link between pension increases and earnings.

Surely this is so expensive it will never come off?

Supporters claim that this higher pension would be paid for by scrapping additional means-tested benefits such as the pension credit, which is costly to administer and, basically, entitles everyone to a minimum pension of ?105 a week anyway. Further savings could be made by ditching the State Second Pension (S2P) - formerly known as Serps.

Proponents of the citizen's pension claim the Government would save money initially, although they concede that reinstating the link between state pensions and earnings would raise state pension costs over the next 20 years.

Who stands to benefit?

The basic state pension, currently just ?79.60 a week for a single person, is due to rise to ?82.05 in April. This is topped up to ?105, through pension credits, for people with no additional income (people with small savings are also able to claim additional help through the pension credit).

A citizen's pension with the same minimum income guarantee may not seem to benefit anyone. But it is estimated that a quarter of those entitled to pension credit - about a million people - fail to claim, either because they are put off by the complexity of the process or by the stigma attached to means-testing.

The citizen's pension will assist the estimated 8 million people who do not qualify for the full basic pension because they do not have a full NI contributions record.

But isn't everyone entitled to a basic state pension?

A common mistake. In order to qualify for the full basic state pension, men need 40 years' worth of NI contributions, and women 35 years. The TUC is calling for a change to these rules, in particular the so-called "25 per cent rule" - whereby retirees must have worked for long enough to accrue at least 25 per cent of the basic state pension. Those accruing less than this get nothing at all. Many women - who are more likely than men to have worked for 10 years or fewer - do not qualify for the basic state pension at all.

How soon could a citizen's pension be introduced?

The NAPF says that it could be in place in 2010, providing it is taken up by whichever party wins the next election.

Is it likely to be taken up?

The Lib Dems and the Scottish National Party already support the idea. The Conservatives are said to be looking at it. Alan Johnson, the pensions secretary, acknowledged in October that it "deserves closer examination" and that he was "veering towards being positive about it". Given the usual non-committal sounds made by ministers, this was taken as an indication that the Department for Work and Pensions was seriously considering it.

How would a citizen's pension affect existing benefits?

Any existing benefits accrued through Serps or the S2P would still be paid to those entitled to more than ?105 a week. For example, someone with sufficient NI contributions to qualify for the full basic state pension (?79.60), plus an additional S2P of ?62.00, would receive ?141.60 a week, as under the existing system.

However, someone retiring on a ?55 basic state pension, plus ?20 S2P (typical sums received by many women) would receive just the ?105 citizen's pension, but not the extra ?20 S2P on top.

If the citizen's pension is introduced, then people working will not accrue any further benefits through the S2P.

It's not much, ?105 a week. How do I get more?

You will, of course, be able to save for a bigger pension, through a company pension scheme or through a private pension plan. Income from these pensions will be paid on top of the citizen's pension.

Also, lower earners could be confident that any additional savings would boost their retirement income. At present, those who are only able to accumulate a modest pension can lose out on means-tested benefits and be no better off than if they hadn't saved at all.

This, says Alison O'Connell, a director of the Pensions Policy Institute, is one of the main advantages of the citizen's pension: it will provide clear incentives for all to save; it will also give people a far clearer picture of what to expect. Most people, now, have little idea what they will receive from the S2P, means-tested benefits or even the basic pension.