State pension alert: Starting amounts may be lowered by certain private plans – full list

Martin Lewis discusses state pension underpayments

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State pension payments require at least 10 years worth of NI contributions, with 35 years needed for the full amount of £175.20 per week.These payments will typically come through once a month but initial payments may be lower than expected due to certain private arrangements.

A state pension starting amount may include a deduction if the claimant was in certain:

Earnings-related pension scheme at work such as a final salary or career average pension before April 6 2016

Workplace, personal or stakeholder pensions before April 6 2012

It’s possible people may have paid lower NI contributions to pay into one of these pensions instead.

This is known as being contracted out of the additional state pension and will affect most people who have been in work.

People can check with their pension providers if they’ve been contracted out in the past.

Also, people can check their old payslips to see if they were contracted out.

The NI contributions line will have the letter D or N next to it if a person was contracted out.

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If the letter A is in this line the person will not have contracted out and if there’s any other letter involved, the pension providers involved will need to be contacted for more information.

The Government notes a person is more likely to have been contracted out if they worked in the following sectors:

  • The NHS
  • Local councils
  • Fire services
  • The civil service
  • Teaching
  • Police forces
  • The armed forces

As it stands, state pensions can only be claimed when a person reaches their state pension age, which is currently sitting at 66 for most people.

However, the state pension age will be rising to 67 between 2026 and 2048.

Beyond this, it will rise to 68 by 2018.

State pensions will not be paid out automatically when a person reaches their retirement age, they’ll need to be claimed.

The quickest way to claim a state pension is through the Government’s website.

However, they can also be claimed over the phone or through the post.

Initial payments may take up to five weeks to come through.

Beyond this, payments will come through every four weeks into an account of the claimants choosing.

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