State Pension - Contracted in vs Contracted Out

[imanopossum]

Does anyone know what happens with the new flat rate pension for people who were contracted in vs those contracted out back in the day?

State pensions were reset in 2016. A formula was used to calculate the value of your state pension at that date, and people who were contracted out had less than those who weren’t. From 2016 on everyone accumulates pension at the same rate.

You can look up the current value of your state pension at www.gov.uk/check-state-pension.

When you look at it on the above site make sure you read the full page it throws up with all your info.

The big number isnt what you’ve accumulated to date it’s a projection based on if you keep working/contributing to your state pension age.

What you actually have is in smaller writing! I’ve to keep working a few years although I’ve worked over 30 years as some was contracted out and some was part time.

Ah right, thanks for the link. So even if you work the full number of qualifying years after 2016 you would still get less than the full flat rate if you were contracted out prior to 2016?

Yes. But you can go on working for extra years until you reach the full flat rate. Each extra year you work will give you an extra £5 a week when you retire, up to the maximum of £175 a week.

The new flat rate is quite a bit higher than the old rate was for people who were contracted out, so many people will find they have a higher pension under the new scheme than they would have done under the old one.

I've worked for 35 years but still fall short for full state pension due to being contracted out

I’ve worked 35 years by April next year and was contracted out of SERPS, I’ve made up my shortfall by next April according to the government pensions site so you do have the opportunity to make it up if you’re still working.