Speaking in his Budget 2013 speech, Osborne said the single-tier state pension is set to provide a guaranteed income of around £144-a-week to all retirees by combining all existing benefits and credits.
The decision to implement the new pension system earlier than planned will mean thousands more retirees are able to enjoy the new system, which the chancellor hopes will please elderly voters.
The move was welcomed by head of resources at The Pensions Trust, Andrew Walsh. Speaking to HR magazine, Walsh said: "We're delighted the reforms are being brought forward.
"If anything we would have liked to have seen it brought in even earlier. This move will help many working families and believe it will be a huge help for savers in what is still tough economic times."
Osborne has also handed The Pensions Regulator (TPR) a new objective to consider the growth prospects of sponsoring employers when setting deficit recovery plans.
The new objective will ensure an employer's need for sustainable growth is considered during scheme funding negotiations and is properly reflected in trustees' dealings with the employer.
He said employers will save on National Insurance Contributions (NIC) and public sector employers must absorb the cost.
He added that defined benefit (DB) members will pay "the same rate of NIC as everyone else" and receive a greater pension income in return.
Osborne called the move a "progressive pension reform" and pledged the money saved "won't be kept by the Treasury".
He said: "An individual who is 40 years old when single tier is introduced in 2016 would contribute an extra £6,000 of NICs before reaching state pension age in 2043.
"But they would gain £24,000 in extra state pension over the course of their retirement. An individual who is 30 years old when single tier is introduced in 2016 would contribute an extra £7,000 in NICs before reaching State Pension age in 2054. But they would gain £18,000 in extra State Pension over their retirement."
