Pensions minister Baroness Ros Altmann has pledged to ‘clear up' confusion over the new state pension.
In a series of comments on Twitter over the weekend, Baroness Altmann she had "been left to clear up the previous lack of clarity" with regards to the new rules but promised she would try and help people understand the new system.
She specifically said she would help people understand the impact of contracting out on the new State Pension - getting the message across that they were receiving a lower state pension because some of their past contributions had been channelled into different schemes.
Baroness Altmann said people needed to add together what they will receive in state pension with what they will receive from contracted-out rights to understand the full picture - adding that the combined figure would be "well over" £155 per week from April 2016 for most people.
She added that most of those who contracted out into defined benefit schemes would end up with more than the state rights they gave up and noted that those who contracted out into a money purchase scheme "chose" to take the risk of no extra state pension, but would have at least the equivalent of the Basic State Pension.
Baroness Altmann's comments after Barnett Waddingham senior consultant Malcolm McLean - who was crowned Pensions Personality of the Year 2015 at the UK Pensions Awards last month - identified confusion over the new state pension as one of the three key challenges facing pensions.
In an interview with Professional Pensions, McLean said: "I think the new state pension is going to be a disappointment to many people, certainly in the early years, because of the deductions that are made for contracting out.
"Initially the government was talking about this new, more generous, flat-rate state pension - well it is not more generous for everybody and it is not flat-rate for a number of people. There are going to be some issues around this and the government probably needs to look again at the deductions that are being made for contracting out."
Baroness Altmann can be followed on Twitter at: https://twitter.com/rosaltmann
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