Older coupleBritons approaching retirement are being misled by the government over changes to the National Insurance (NI) contributions they must make to qualify for the planned £144-a-week "single-tier" state pension.

That's the view of pensions expert Ros Altmann, who has already blasted the latest flat-rate pension proposals for unfairly penalising some workers.




The government announced last week that, under the new system, workers would need 35 years of NI contributions to qualify for the full pension, compared with just 30 years at present.

However, in letters received after the single-tier announcement, some people approaching retirement were being reassured that they would need just 30 years' NICs due to a previous reduction in the number of years required.

The mixed message is due to letters sent out explaining separate legislation concerning the state pension age.

Consequently, many of the recipients are likely to be women approaching retirement, who will see their state pension age rise to 65 or 66 (depending on their date of birth).

The letters still being sent out to them just days ago said: "The number of 'qualifying years' of paid or credited National Insurance contributions you need for a full basic state pension has been reduced to 30 years."

This relates to a change brought in almost three years ago. However, the flat-rate pension scheme scheduled for 2017 will over-ride this, meaning those who reach state pension age after 2017 will be subject to the 35-year requirement.

And worse still, the Department for Work & Pensions (DWP) has no plans to send out more letters informing those affected of the latest proposals - although future letters will be amended.

"All future letters will make reference to the proposal launched last week to introduce a single tier state pension," it told the Daily Telegraph newspaper.

Altmann, now director general of over-50s specialist Saga, is worried that some people will fail to make NI contributions required as a result.

"I'm concerned that people are going to be misled. It's very unfortunate timing," she said.

She also believes that while some people will be better off with a flat-rate pension, other groups will be disadvantaged.

"The aim of these state pension reforms is absolutely right," she told financial magazine Money Marketing.

"But there are some areas of concern. Making the pension less generous leads to more people losing out."

Anyone confused about their state pension entitlement is advised to visit the DWP website for more information.



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