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Contracted out

Between 1978 and 5 April 2016 you could be contracted out of the additional State Pension. The trade-off was lower NI then, lower State Pension now.

When it happened

Defined-benefit schemes contracted out from 1978 to 2016 (the Additional Pension era). Defined-contribution schemes could contract out from 1988 to 2012, when DC contracting-out was abolished. The last possible contracted-out year ended 5 April 20161.

The starting-amount rule

On 6 April 2016 the DWP set everyone's starting amount as the higher of: (a) what they would have received under the old rules (basic SP + SERPS/S2P) and (b) what they would have received under the new rules (max £155.65/wk minus COPE)2. From that starting amount, post-2016 qualifying years still build up to the current full new SP cap.

Closing the gap

Every qualifying year you add after 6 April 2016 (paid Class 1 or voluntary Class 3) adds about £6.89/wk, until the £241.30 ceiling is reached. Some forecasts can be lifted fully; some cannot3.

Adjacent

By Oliver Wakefield-Smith, Founder, Digital Signet.
Rates current for 2026/27 · Verified Q2 2026 · Next refresh after Autumn Budget 2026