State pension: Your sum could be affected by workplace or personal savings – check now

State Pension payments offer stability for people who are approaching their retirement, and can often be a key source of funding for later life. The new state pension sum is currently set at £179.60 per week, although the amount someone actually receives will be based on their National Insurance contributions. Most people will want to maximise the amount they get out of their state pension each year.

Firstly, if someone was in an earnings-related pension scheme at work, such as a final salary or career average pension before April 6, 2016, they could have a deduction.

In addition, if someone had a workplace, personal or stakeholder pension before April 6, 2012, their starting amount could also be affected.

Certain individuals may have paid lower National Insurance contributions and paid into one of these pensions instead.

This was a common practice which was known as being “contracted out” of the Additional state pension.

If it is not clear, or a person does not have this kind of information, Britons do not have to panic.

People will be able to check with their pension provider to see if they have been contracted out in the past.

If someone has lost contact with their pension, they could use the Pension Tracing Service to provide help. 

The rules, however, surrounding this kind of arrangement have changed within recent years.

When the new state pension was introduced on April 6, 2016, individuals will no longer be contracted out.

As a result, they are likely to pay more National Insurance – but no more than the standard amount. 

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