End of Contracting Out
Since the 6 April 1978, members of the LGPS have been paying a
reduced rate of national insurance contribution by virtue of being
"contracted out" of the State Earnings Related Pension Scheme SERPS
- known more recently as the State Second Pension or S2P.
This means that instead of paying full national insurance
contributions and getting both the basic state pension and the
2nd state pension LGPS members pay a reduced rate but
only get the basic state pension.
However; The government has now decided to change the way state
pensions are earned. From 6 April 2016 there will be a single flat
rate pension for everyone. Although to get the full amount you
would have to pay the full national insurance amount for some time.
For details please see the link to the state pension website.
As a result of this change to the state pension the government
announced that it was ending the option for pension schemes to be
contracted out of the state pension scheme. This means that from 6
April 2016, members of the LGPS will pay the full rate of national
insurance contributions. The amount extra that you have to pay will
depend on your salary. Below are some example increases:
It is important that you understand how much state pension that
you will receive and when you will receive it.
It is important that you understand how much state pension that you
will receive and when you will receive it. Please look at the
government website using the following link: https://www.gov.uk/state-pension/overview