Single-Tier State Pension Legislation Becomes Law
Legislation to introduce a single-tier state pension has become law with the introduction of the Pensions Act 2014.
The new rules will replace the current system of a basic state pension plus additional top ups for people who reach state pension age on or after 6 April 2016.
The Government predicts that women, carers and some low earners are set to benefit from the changes.
In the first 10 years, around 650,000 women are expected to benefit from the reforms, receiving on average an extra £8 a week.
Key changes:
- People will need 10 qualifying years of national insurance contributions to receive any state pension.
- People who start their national insurance record after the reforms are introduced will need 35 qualifying years to receive the full state pension. This replaces the current 30 years.
- The Government has introduced a triple lock guarantee to protect the value of the state pension. This means state pensions will increase by inflation, earnings or 2.5% – whichever is highest.
Minister for Pensions, Steve Webb, said:
“The new state pension will replace the current complex mix of basic and additional state pension which successive governments have tinkered with so much over the decades.
“It will give people clarity and confidence about what income they will get from the state in their retirement. In addition, the State Pension reforms will benefit those who have historically done poorly under the current 2-tier system.”
