Government minister admits new State Pension has been 'mis-sold'
"There is so much misconception" confesses pensions minister.
A government minister has admitted that major reforms to the State Pension have been mis-sold to the public.
Interviewed on BBC 4’s Woman’s Hour programme, Pensions Minister Ros Altmann conceded that people were misled into thinking they were going to get the full £151.25 a week ‘flat-rate’ pension. She said: "There is so much misconception about this £150 a week. It is the maximum and it's not something everyone will get in the beginning."
Altmann has previously admitted that only 37% of people reaching State Pension age next year will qualify for the full new State Pension.
Last month the Pensions Select Committee announced a probe into the government’s ‘selling’ of State Pension reforms amid widespread public confusion.
What is the new State Pension?
At the moment the basic State Pension is £115 a week, with various additions made depending on your lifetime's earnings. However, from April a new 'flat rate' State Pension will be introduced, which the government has claimed will be more generous. In theory, anyone who has made 35 years of National Insurance contributions will qualify for the full payment, which will be no less than £151.25 a week (the exact figure is still to be officially confirmed).
However, in practice it will be more complicated than that as many people will have been 'contracted out' of the Additional State Pension. This may be because they were in certain workplace pension schemes (for example final salary or career average pension schemes), and so as a result will have paid lower National Insurance contributions. They will then not qualify for the full new State Pension.
You can check with your pension provider if you've been contracted out in the past. Alternatively you can call HMRC on 0300 200 3507.
You can also get a State Pension statement from HMRC to get an indication of how much of the new State Pension you are likely to get. If you are due to receive less than the full amount, then you may be able to add more qualifying years onto your National Insurance record by making additional payments to the taxman. For more, read Boost your State Pension by £25 a week.
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ok so i have 37 qualifying years, 4 years in a contracted out scheme so i do not qualify for the full pension, as i am still not of retirement age if i add an extra 2 years of contributions, will i then get the full pension? or will the goverment still do me down :(
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Steve Webb was a waste of space, pandering to the pension industry and not to pensioners, pension schemes and sponsoring companies. Frankly I am surprised if Ros Altmann understands the new rules either.
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This is news to me and I have taken an active interest. I've also had a good row with my useless MP, and he never mentioned the fact that you have to be contracted in to get the full amount. So what's it worth if contracted out? And I still say it is grossly unfair, as two pensioners who have been contracted in, but were born a few minutes apart will get totally different pensions. This is rotten to the core. My state pension is quite good, but would be better if the additions were added to the new higher 'core' value.
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21 December 2015