The new State Pension is designed to be simpler and clearer than the previous system. Under the old system, there were two types of State Pension: basic and additional. Everyone with 30 years of National Insurance (NI) contributions got the full basic State Pension. Most people who paid the full rate of NI also accrued additional State Pension.

However, many people chose to ‘contract out'. This means they paid lower NI to opt out of any additional State Pension, contributing instead towards a workplace pension. For people reaching State Pension age from 6 April 2016 onwards, contracting out and the system of basic and additional State Pension has been abolished. There is now a simple, flat-rate State Pension.

The end of contracting out means everyone is now paying the same rate of NI. Eventually, that will mean everyone with 35 qualifying years will receive the same State Pension. A calculation was made in 2016 for the new State Pension that took into account any years contracted out, to account for those who opted out of additional State Pension.

I hope this reassures you that the new system does not disadvantage current pensioners. Those who receive the full new State Pension are usually those who would have received a higher State Pension anyway, because of their contributions, and no one who qualifies for the new State Pension will be worse off than they would have been under the previous system, based on their NI record to 6 April 2016.