There are plans to simplify the current state pension system as many are “baffled by it”.

That has been the conclusion of the National Association of Pension Funds, which has decided that the time is ripe to create a universal Citizen’s Pension.

It is hoped this will eliminate the current confusion and cut away the complexities of the current system.

The idea has gathered support from a wide range of voices in the political, business, trade union and academic communities.

As a result a new high-level working group, set up by the NAPF, has been formed to tackle the issue.

NAPF chief executive, Christine Farnish, said: “Over the years, the UK’s pension system has become ever more complex and confusing.”

She continued: “If people don’t understand the state pension system, the most complicated in the western world, how can they be expected to make meaningful plans for retirement?”

Ms Farnish explains that the NAPF is proposing, “radical simplification of the state pensions system, based on a simple, flat rate, universal state pension, payable to everyone satisfying a minimum residency test.”

The new pension would replace the current basic state pension, second state pension and means-tested pension credit.

The Pensions Policy Institute has been commissioned to carry out a detailed analytical work on the project.