Martin Lewis discusses state pension underpayments
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State pension claimants born before the early 1950s may have been eligible for the “additional” state pension. This is an extra amount of money awarded on top of a basic state pension for men who were born before April 6 1951 or women born before April 6 1953.
Where claimants are eligible for the additional state pension, they should get it automatically.
There is no fixed amount for the additional state pension and there are currently three main schemes for it which includes the state second payments, the state earnings-related pension scheme (SERPS) or the state pension top up.
Some people affected by these schemes may have had the option of contracting out, which allowed people to contribute to a workplace pension scheme instead of the additional state pension.
People who chose to contract out would have usually ended up with the same amount or more than the additional state pension top ups.
For those who are unsure, it is possible to find out if one was contracted out during their working years.
This can be done by:
- Checking old payslips or
- Calling pension providers
Where a person was contracted out, their National Insurance payments would have been altered.
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Lower National Insurance contributions would have been paid while a person was contracted out if:
- They earned between £155 and £770 a week
- They were under state pension age
- They did not pay reduced National Insurance
The Government notes people were more likely to have been contracted out if they worked in the public sector for organisations such as the NHS, local councils or police forces.
To be eligible for state pension payments a person must reach a specific state pension age.
For most people, this will currently be 66.
However, the state pension age will be rising over the coming years, hitting 67 between 2026 and 2028.
Beyond this, the state pension age will reach 68 by 2046.
Going forward, most people will receive the new state pension and will no longer be affected by contracting out.
The new state pension requires at least 10 years of National Insurance contributions to claim.
To receive the full amount of £179.60 per week, at least 35 years will be needed.
Claims for a state pension can be made online, over the phone or through the post.
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