Couple talking about their pensionsQ: Can you tell me more about the planned changes for new flat rate pension?

A: The Government recently confirmed it plans to introduce a new flat-rate pension of £144 a week in April 2017. This will rise to £155-£160 in four years’ time.

The new flat-rate pension will replace the basic state pension, currently £107.45 per week, as well as the various top-up pension credits and additional state pensions. It is hoped this will be an easier system to understand and manage.

However, it will be tougher to claim the full state pension under the new rules. A maximum of 35 years of national insurance (NI) contributions will be needed, which is an increase of five years on the current requirements. Anyone with less than 10 years’ contributions will not receive a pension.

The self-employed, in particular, will benefit from this new flat rate as they are currently only able to receive £107.45 a week because they aren’t able to build up a Second State Pension.

And women, especially those who have taken time out of the workforce to care for children, will also do better out of the flat-rate scheme. Although they will need 35 years of NI contributions to qualify for the full state pension, those with less years of contributions will get a higher amount than they would under the current system.

Andrea Ventress, money expert

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