State Pension contracted out: What does it mean to be contracted out of the State Pension?
The State Pension comes in two forms, the Basic State Pension and the New State Pension. The Basic State Pension is the old kind and comes at £134.25 for the full amount. In contrast, the New State Pension comes at £175.20 per week at its maximum, and the amount you will get depends entirely on how many qualifying National Insurance years you have when you reach the right age.
What does it mean to be contracted out of the State Pension?
The rules of being contracted out only apply to the old State Pension.
Under the old State Pension rules, you were able to contract yourself out of the additional State Pension.
The system of contracting out ended in April 2016, but your history will still affect how much State Pension you get under both the old and new system.
In addition to the basic State Pension, the Government used to provide a second-tier top-up pension scheme based on how much you earn.
