State pension: Retirees may get lower initial amounts if they own certain private pensions

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State pension payments can be claimed by anyone who has collated at least 10 years of National Insurance contributions and has reached state pension age. Most people will likely receive the new state pension which can be received by men born on or after April 6 1951 or women born on or after April 6 1953.

Claimants of the new state pension may see their starting amounts include a reduction if they were contracted out of certain private pension schemes.

These can include:

  • earnings-related pension schemes at work (for example a final salary or career average pension) before April 6 2016
  • workplace, personal or stakeholder pensions before April 6 2012

To check if a person was contracted out during their working years, payslips can be checked or employers can be contacted.

Regardless of what a person receives from their state pension, the payments themselves are guaranteed to increase every year under the triple lock system.

The triple lock rules in place force state pension payments to increase by higher is the highest of average earnings, CPI increases or 2.5 percent.

Currently, the full state pension amount is £175.20 per week.

What a person actually receives will depend on their National Insurance record and if they’ve decided to defer payments or make voluntary NI contributions.

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It should be noted that state pension payments will not be paid automatically.

State pensions need to be claimed and this can be done up to four months before reaching state pension age.

The government details the quickest way to receive a state pension is by applying online.

However, they can also be claimed over the phone or by post.

The payments usually arrive once every four weeks into an account of the claimant’s choosing.

These payments are paid in arrears, covering the previous four weeks as opposed to the coming four weeks.

Initial payments will take up to five weeks to arrive once claimed but claimants will be kept in the loop on schedules.

Payment days will also depend on the claimants National Insurance number.

The day the pension arrives will be based on the last two digits of the claimants National Insurance number.

This set up is as follows:

  • 00 to 19 – Monday
  • 20 to 39 – Tuesday
  • 40 to 59 – Wednesday
  • 60 to 79 – Thursday
  • 80 to 99 – Friday

Should a payment date fall on a bank holiday the money will likely arrive on the first working day before this.

This should be noted as there are a number of bank holidays coming over the Christmas period.

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