6. We’re ending the complicated ‘contracting-out’ system
You may have been ‘contracted-out’; this was where you gave up the right to the additional State Pension in return for paying less into the National Insurance (NI) system. This may have happened if you have a private or workplace pension.
But from April 2016, contracting-out will end – and so will the reduced NI rate that contracted-out employees get now.
Whether you’ve been contracted-out or not, if you have 30 years on your NI record at April 2016, you’ll get at least as much from your contributions under the new State Pension as you would have under the old system.
7. It pays to join your workplace pension
Most people wanting to maintain their living standards into old age will need to have their own private provision as well, normally in the form of a workplace pension.
We’ve made it easier for you to do this by getting employers to automatically enrol you into a workplace pension, if you’re eligible. You can opt out if you think that pension saving isn’t for you.
And it pays to save – your boss will also pay towards it and you get tax relief.