A new flat-rate state pension will be introduced, worth around £140 a week, the pensions minister has confirmed.
This will replace the current pension system and means testing will be scrapped so everyone will now be able to claim the same amount.
Women who currently miss out on receiving a full state pension because they've taken time out of work to look after children, low earners and the self-employed will benefit most from this news as they will now be able to receive the flat rate.
In the recent Budget, chancellor George Osborne confirmed that the 'unbelievably complex' state pension system currently in place is likely to be replaced with a weekly £140 flat-rate pension.
But the changes will not apply to current pensioners and Osborne admitted it would take 'years to come into effect'.
At present anyone over the age of 65 is entitled to a basic pension of £96.65 a week.
On top of this the is the means-tested element for lower earners - known as pension credit, boosts pensions up to £132.60 a week for a single person and £202.40 for couples.
The government has already brought forward the rise in the state pension age from 65 to 66 to 2020 from 2026.
Criticising the current system, secretary of state for work and pensions, Iain Duncan Smith, said: "Over the years small changes to the state pension system have turned what started as a relatively simple contributory system into a complex mess, leaving people utterly confused as to what the state pension means for them."
Steve Webb, minister for pensions, says state pension reform would underpin existing plans to automatically enrol people into workplace pensions from 2012, bringing between 5-8 million people into saving for the first time
"I'm proud to bring forward proposals that will end the unfairness inherent in the system and secure a fair, decent and simple state pension fit for the 21st century. These reforms will transform pension saving in this country for millions of people," he adds.