Question:

When does a person contract out of the Additional State Pension in United Kingdom?

by Guest28048238  |  6 years, 9 month(s) ago

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When does a person contract out of the Additional State Pension in United Kingdom?

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  1. Guest28048239
    You can only contract out if your employer runs a contracted out pension scheme. Check with them. If you’re a member of a contracted out workplace pension you don’t contribute to the Additional State Pension for the time you belong to the scheme. This means that when you retire you either don’t get any Additional State Pension or it might be reduced, depending on how long you contracted out. You and your employer pay lower National Insurance contributions while you contract out. When you retire, you’ll get a pension from your employer’s scheme. To contract out you must be: . earning at least the lower earnings limit of £5,564 a year (in 2012 to 2013) . paying Class 1 National Insurance (or treated as paying them - check with your employer) Different rules apply if you’re a member of a salary-related pension scheme before 6 April 1997. These rights, known as the ‘Guaranteed Minimum Pension’, can’t be taken before age 65 (men) or 60 (women). The Guaranteed Minimum Pension will continue to be paid at these ages even when the State Pension age rises.

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