New state pension entitlement

How Contracting Out Affects Your New State Pension Entitlement

The new state pension entitlement depends on your National Insurance (NI) record. If you were ever contracted out of the state scheme, your entitlement may be lower than expected.

Contracting out meant paying reduced NI contributions in exchange for building up private or workplace pension benefits instead of the full state pension. Many people in certain public sector or workplace pension schemes were automatically contracted out.

Can Recent National Insurance Contributions Improve Your Pension?

The good news is that even if you were contracted out, recent NI contributions could improve your new state pension entitlement. If you are still working and paying NI or your earnings fall within the nil band, newer contributions can replace older years with lower value.

Even if you already have 35 qualifying years, additional years could boost your pension if some earlier years do not count as fully qualifying.

Checking and Maximising Your State Pension

To check your new state pension entitlement:

• Use the Government’s state pension forecast tool on the HMRC website.
• Review your NI record to identify any gaps.
• Consider making voluntary NI contributions to boost your pension if shortfalls exist.

If you were contracted out, it’s especially important to understand how this affects your final pension amount.

How We Can Help

Understanding your new state pension entitlement can be complex, especially if you were contracted out. At Lewis Brownlee, we can help you review your NI record and explore options to maximise your pension.

For expert guidance, contact us today. Our team is here to assist you.