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Single-tier pension and social care cap brought forward by a year

Plans to overhaul the state pension system will be brought forward by a year, Chancellor George Osborne has announced.

The Chancellor recently unveiled his plans to simplify the state pension system, with the introduction of a flat-tier pension worth around £144 a week, from 2017.

He also announced the planned introduction of a new £75,000 cap on the amount paid by the elderly for social care, to be funded by a freeze in the inheritance tax threshold.

However, the changes to pensions and the social care cap will now both take effect in 2016, with the social care cap set at £72,000.

Announcing the changes ahead of this week’s Budget, Mr Osborne warned that there are ‘no miracle cures’ for the economy, fuelling speculation that he will stick to his ‘Plan A’ for reducing the deficit, despite facing mounting pressure to change course on the economy by increasing borrowing in order to fund tax cuts and boost capital spending.

The Chancellor has also indicated that the Budget will include measures aimed at helping homebuyers, start-up businesses and apprentices.

The Budget will take place on Wednesday 20 March. Visit our website for updates on the latest announcements.