By Rosie Niven | 18 August 2015
A simplified state pension will abolish ‘outdated inequalities and create a fairer society’, pensions minister Steve Webb said, marking 600 days until the start of the new system.
The new state pension, which starts on April 6 2016, is designed to be simpler for people to understand and create a solid base for extra saving.
The government has said women will be among the main winners from the new system as time they have spent out of the workforce caring and bringing up children is better recognised.
Some 650,000 women will receive an average of £8 a week more – or around £400 a year – in the first 10 years, from the way their National Insurance contributions (NI) are valued under the transition to the new system.
Around 80% of those reaching retirement age by the mid-2030s are expected to be in receipt of a full state pension. The government says that those who receive less than the full rate, because of insufficient NI contributions, will, in many cases, be better off than they would be today.
The full level is set above the basic means-test level for pension credit, which in 2014/15 is £148.35.
Webb said: ‘The new state pension will be a much fairer system and is designed to help groups which have traditionally been disadvantaged – including women and the low-paid – to build a strong financial foundation for their retirement.’
‘In the future, all years spent contributing to society whether through paid work or caring responsibilities will be of equal value.
‘The new state pension will be a clear improvement on the current system, removing layers of complexities. It’s part of our work to abolish outdated inequalities and create a fairer society.’
