Self employed people could be amongst the winners of the government’s new single tier pension.
The white paper details plans to change the current £107.45 basic pension with various tops up, to a flat rate of £144 from 2017 at the earliest.
The single tier pension is to replace a “complex” system which involves add-ons and means testing.
Current rules involving national insurance contributions mean that self employed people often find it hard to earn the state full pension. The simplification of the rules is set to change that.
Pensions Minister Steve Webb said: “The current state pension system leaves millions of people needing means-tested top-ups. We can do better. Our simple, single tier pension will provide a decent, solid foundation for new pensioners in an otherwise less certain world, ensuring it pays to save.”
However, other people will not gain from the changes, with the majority set to receive lesser pensions in the future.