Higher-earners set to lose out after pension changes

Pensioners look set to benefit from a new flat-rate pension announced by the government today, but Preston-based financial advisory group Taylor Patterson warns some people will lose out.

This is good news for those on lower incomes, who will see their basic state pension increased from £107.45 as it stands at the moment, but higher earners face a cut in retirement income as they would previously have been entitled to a top-up funded through their National Insurance contributions.

Colin Wildman, employee benefits consultant at Taylor Patterson, said: Rewer people will qualify for the maximum state pension as the government has increased the minimum National Insurance (NI) contribution period from 30 years to 35 years. There is also a minimum qualification period of ten years, so anyone with fewer than ten years of NI contributions, will not get a state pension.”

”Individuals on higher incomes will also lose out. Currently, higher earners can receive a state pension of up to £250 a week. After April 2017, it will be capped at £144 a week, in today’s money, although they’ll be able to keep benefits accrued up to that point.”