Transitional arrangements for people reaching state pension age from 6 April 2016 who worked before this date

NI contributions/credits built up before April 2016 will count in the new system. Indeed, for anyone with a history of paying in both before and after April 2016, transitional arrangements will apply.

These are necessarily complex and built to reflect the inequities in the current system and to lessen the potential for ‘winners and losers’ to emerge. The pension entitlement built up from NI before April 2016 is called the starting amount.

This starting amount is calculated as if you reached state pension age on 6 April 2016 and is the better of:

  • the amount you have built up in the system that was in place before April 2016 (ie through Basic State Pension and any Additional State Pension)
  • the amount you would have built up had the new single-tier system been in place for your whole working lifetime, with a deduction made to reflect any periods of contracted out service.

If your starting amount exceeds the original maximum level of single-tier pension (i.e. £155.65), you retain the entitlement to this higher amount of weekly state pension, known as a protected payment.

But you would not build up any further entitlement above this amount as a result of paying National Insurance contributions from April 2016 onwards.

If your starting amount is lower than the maximum single-tier pension, you can continue to add to this through future National Insurance contributions from April 2016.

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