Millions of Brits will get poor pensions

Photo: Cordon Press.
A pension shake-up could leave Brits worse off.

Some four in five people could miss out on the full flat-rate state pension of £155 a week when it is introduced in April 2016.

Millions may also face losing thousands of pounds in inflation-linked increases on company pensions.

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The devastating news, revealed by a Daily Mail investigation looking at the new flat-rate pension plan small print, will especially hit those within two years of retirement.

The Government pledged that the new £155 a week pension was guaranteed to everyone who had paid all their National Insurance contributions for 35 years.

But the Daily Mail claims to have uncovered a series of unsavoury surprises and say that the issues are highly complex and technical.

And they claim that not even the Government is fully aware of how much less pensioners could be getting under the biggest shake up to pension schemes in decades.

Under the current system, workers would qualify for the full basic state pension of £113.10 a week if they have paid 30 years’ worth of NI contributions. 

The investigation found that under the new regime these workers would have their payout docked. 

The main problem hits employees, who, at some point in their working life, were members of a final-salary scheme. 

As these pensions were so generous, employees were allowed to opt-out of receiving extra benefits such as the State Second Pension.

In exchange for this, they were allowed to pay a reduced rate of National Insurance. This is called ‘contracting out’.

Official government figures reveal that some 80% of older workers ‘contracted out’ at some point in this way.

The UK Government has decided that as these people paid lower contributions, they should lose some of their state pension.

It means that middle to high earners could find themselves worse off in the long term.

In an attempt to simplify the new system all additional benefits, such as the State Second Pension and Pension Credit, are being scrapped. However, this retrospective rule-changing could dent pension plans for millions.

Discussing the new flat-rate pension, the Department for Work and Pensions confirmed that some workers will be denied the full £155 a week payment.

In a statement, it says: ‘It is therefore possible that someone might have 35 qualifying years when the new state pension is implemented and not receive the full single-tier amount.’ 



  1. The flat rate pension should be paid to all pensioners in proportion to the number of NI contributions paid, and uprating of the State Pension should not be dependant on where a pensioner chooses to live, be it an EU, Commonwealth or any other country.
    UK Citizen for a just and fair society. JA


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