Pensions minister Steve Webb has announced that the single state pension will be introduced a year earlier than planned, netting the government an additional £5.5 billion in National Insurance revenue.
The single state pension means that everyone will be entitled to a standard rate of £144 a week, provided that they have contributed to national insurance for long enough. The complex system whereby some people can claim a second state pension and contracting out will end. Increases in the state retirement age will come into force at the same time, with the retirement age being increased to 67 in stages.
In a statement, Webb said that the new system would ‘create a simple, decent state pension, which is set above the basic means test sooner. The new state pension will be fairer to the low-paid, the self-employed and carers and make it easier for people to understand what they will get from the state when they reach state pension age.’