Under the new proposals, anyone with a 30-year NI contribution history will be entitled to a full state pension, but if someone enters the workplace at 16, alongside the proposal to increase the retirement age to 66 for men and women in 2024, people could be left with 20 years of contributions before they retire for which they will not receive anything in extra income.
The government have said that the change to the contributory basis was designed to help those with incomplete histories, such as women taking time out to raise children or those off work caring for relatives.
Our view
The Government's changes to national insurance contributions announced with the publication of the Pensions White Paper, are a further hidden tax that will end up going towards meeting the existing pensions shortfall.