Budget 2013: Extra £5.5bn raised from pension in 2016 21 March 2013 Last updated at 13:24 The UK Treasury's coffers will receive an extra £5.5bn after the government brought forward the introduction of the new flat-rate state pension by a year. In the Budget on Wednesday, it was revealed the bulk of the money - £4.7bn - will come from public-sector employers and employees. The Treasury will get more because the new system stops people contracting out of the state second pension. About 400,000 more will qualify for the new pension worth £144 a week. The new flat-rate pension replaces the current basic pension of £107 a week, plus various means-tested top-ups, and will come into effect in 2016, rather than 2017 as anticipated by a government White Paper in January. The change involves merging the state second pension with the basic state pension. The government says this new system is fairer for the self-employed and many mothers. Contracting out This will abolish the current practice whereby employees get a National Insurance (NI) rebate of 3.4% for contracting out of the second state pension to enter final-salary schemes, which affect more workers in the public sector such as in the NHS, the UK's largest employer. Employers will now have to pay higher NI, amounting to that 3.4% of their employees' relevant earnings. The Treasury revealed that public-sector employers will pay £3.33bn and employees £1.37bn more to the Treasury in 2016-17 as a result of bringing in the pension earlier. From the private sector, employers will pay an extra £570m and employees £235m. In the Budget, the government said: "For employees, single-tier will make the state pension system fairer by ensuring that, from 2016-17 onwards, everyone except for the self-employed will pay the same rates of NICs [National Insurance Contributions] and build up access to the same single-tier state pension. This means that those who are contracted out in 2016-17 will contribute more in National Insurance, and in return they will get a more generous state pension. The Treasury added: "None of the additional employee and private sector employer NICs will be used for net revenue-raising," meaning that the government does not intend to profit from the extra money and the money, which will be offset by extra cuts elsewhere. From 2016, people will also have to work longer, making 35 years of NI contributions, rather than the current 30, to qualify for the full pension.