HMRC stops sending statements to those ‘contracted out’

If you ‘contracted out’ of the state pension between 1978 and 1997 you will no longer receive a statement from HM Revenue & Customs (HMRC) that lays out your entitlement.

According to the Financial Times, HM Revenue & Customs (HMRC) had been due to send a statement to members of private and public sector schemes detailing their ‘contracting out’ agreement by December 2018.

The paper says this will no longer happen following a decision by HMRC to do away with the statements to millions of taxpayers.

HMRC told the Financial Times that: “The change is being made because there have been developments in the provision of pension scheme information since we first started the changes to end contracting-out.”

Those who opted to ‘contract out’ paid less in National Insurance Contributions, meaning their entitlements would be reduced. Therefore, the decision to remove the statement may mean that some taxpayers are unaware of a reduced state pension.

HMRC has said that the ‘check your state pension’ service already includes full details of all national insurance contributions for each year, meaning that no one will lose out.

Despite these claims there are still many experts that fear that the Revenue is cutting corners to save costs, which may impact on those who are unaware or unable to use the ‘check your state pension’ service.

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