The Chancellor has confirmed a £140 a week flat-rate basic state pension will be introduced early in the next Parliament.
George Osborne told the House of Commons a single-tier pension, above the level of means-testing, would be introduced and cost no more than the price paid for the current system.
Osborne said more information would be released next month.
He said it would be a "generous basic state pension for those who have worked hard and saved hard all their lives".
Bluefin head of technical, marketing and research Robin Hames backed the announcement.
He said "The complexities of the upcoming automatic enrolment process meant that alongside the existing state pension setup, some employees enrolling into a workplace pension scheme would actually have found themselves penalised financially when they reached retirement - a wholly unattractive prospect.
"This new flat-rate state pension, once implemented, will eliminate that scenario and make pension planning much simpler. However, with the implementation date of this flat-rate still some way off, this situation will remain in the interim."
Osborne also said the government would increase the basic state pension by £5.30 a week shortly.
He added the current age related tax allowance system needed significant reform.
Some 150,000 pensioners have to fill in self-assessment forms, something the Chancellor wants to reduce.
Budget notes said to spread tax relief fairly across working age people and pensions, from 6 April 2013 existing ARAs will be frozen at their 2012-13 levels until they align with the personal allowance.
These ARAs currently stand at £10,500 for those born between 6 April 1938 and 5 April 1948, and £10,660 for those born before 6 April 1938
The notes said: "These changes will simplify the system and reduce the number of pensioners in self assessment."
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