The State Pension is changing to a simplified single tier flat rate pension on 6 April 2016, for those who will reach state pension age on or after that date. The single tier will replace the current tiered arrangement (Basic State Pension and Additional State Pension).
If you are an active member you may currently receive a National Insurance Contribution rebate of 1.4% of your pay, depending on what you earn, as you are “contracted out” of the Additional State Pension. From 6 April 2016 you will no longer receive the rebate as the “contracted out” status is ending; therefore you and your employer will pay the higher amount of National Insurance Contributions.
Please note that if you qualify for the new State Pension you may NOT receive the full amount. This is because you have paid lower National Insurance Contributions due to being “contracted out” of the Additional State Pension while you are membership of the Local Government Pension Scheme.
It should also be noted that the introduction of the new State Pension will NOT affect your LGPS benefits and that these benefits will continue to form an important part of your income in retirement.
Please click here to refer to the newsletter sent to LGPS members in December 2015 or the following website for further information:
https://www.gov.uk/new-state-pension/overview
