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Only 45% will get full state pension from April 2016, figures show

The new pension scheme aims to give pensioners a flat rate of around £150 Photo: Gareth Fuller/PA Wire

Less than half of those who start drawing a state pension from April 2016 will be entitled to the full payout, new government figures show.

The new state pension system will see a single payment of around £150 made to eligible individuals who reach pension age after April 2016.

But a Freedom of Information request by consultants Hargreaves Lansdown reveals that only 45% of people who retire between 2016 and 2020 will get the full amount.

The Department for Work and Pensions (DWP) said it is "utterly misleading" to suggest that anyone will be missing out under the new system.

The Department for Work and Pensions says that no-one will be worse off under the new pensions scheme Credit: John Stillwell/PA Wire

Those who are not eligible for the full rate will normally have paid less in National Insurance (NI) contributions because they have a private or workplace scheme in addition to a state pension - an arrangement known as "contracting out".

They may also be entitled to a lower rate because of gaps in their NI contributions.

The new state pension is intended to simplify the system and will give people a "greater sense of economic security and peace of mind in retirement," according to the government.

"Those retiring when the new State Pension is in place will get at least what they would have got for the NI contributions they have paid in the current system, and many will get more," a DWP spokesperson said.

DWP projections show that the proportion of people entitled to the full pension rate rises to 81% by 2031.

Proportion of individuals having at least a certain percentage of the full rate of the new state pension Credit: DWP

The new pension system will only affect those who reach pension age from April 2016 onwards.

Currently, people have to make 30 years' worth of contributions to qualify for a state pension, but this will rise to 35 years after April 2017.

Tom McPhail of Hargreaves Lansdown said that it will "ultimately be a simpler and fairer system," but that "in the short term it will be complicated and many people are likely to get less than they may expect".