The Government said the previous state pension was hard to understand and unfairly biased against many – notably women – who took time off work to care for others or raise a family.
Problems lie in the previous system being made up of two parts: a 'basic' state pension (worked out according to your number of national insurance years) and a 'state second pension', also known as S2P, SERPS or the additional rate.
While the first part was simple enough, the latter caused problems with its complexity – particularly when workers opted out of it (knowingly or otherwise) in a process called 'contracting out'.
The new payout was designed to make the whole process easier to understand, though it's still far from simple.
The new set-up is also a huge boost for the self-employed who lost out hugely under the previous system since they were unable to build up any second state pension.