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The government has proposed to introduce a flat rate (single-tier) State Pension from April 2016 and raise the State Pension age from 66 to 67 gradually between 2026 and 2028.
Flat rate State Pension
The government has proposed that the new flat rate (single-tier) pension will be introduced from April 2016.
Current pensioners and everyone reaching State Pension age before the introduction of the single-tier pension will continue to receive their State Pension in line with existing rules.
Read more information about the single tier pension on the Department for Work and Pensions (DWP) website.
Changes to the State Pension age:
The government has proposed that:
- people born between 6 April 1960 and 5 March 1961 will reach State Pension age between 66 and 67
- people born on or after 6 March 1961 will reach State Pension age when they’re 67 or older
This change hasn’t been approved by Parliament yet.
Under the current law State Pension age will already increase to:
- 67 between 2034 and 2036
- 68 between 2044 and 2046
How much will the single-tier pension be?
- This will not be decided until shortly before single tier is introduced. It will be set above the basic level of means-tested support (the Pension Credit standard minimum guarantee, £142.70 per week in 2012/13). The White Paper used an illustrative full single-tier rate of £144 per week.
- It is proposed that the single-tier pension will be increased each year, by at least the percentage that average national earnings have grown in the previous year. The White Paper assumed that it will be increased by the ‘triple lock’ (i.e. the highest of the growth in earnings, price inflation or 2.5%) consistent with the basic State Pension now.
I reach State Pension age before 6 April 2016
If you are already over State Pension age, or reach your State Pension age before the new scheme starts, you will continue to receive your State Pension in line with present rules.
I reach State Pension age after 6 April 2016
If you reach State Pension age after the new scheme starts your state pension will be based on the single-tier scheme. The contributions on your National Insurance record under the current system will count towards your single-tier pension. As long as you satisfy the minimum qualifying year requirement you will get a single-tier pension no lower than the valuation of these contributions.