Money Clinic

Annie Shaw / 12 August 2019

Annie Shaw answers a query on contracted out pensions, plus can my son drive my Motability vehicle?


I am dismayed to learn that I won’t get the full new state pension when I come to claim it because of something called ‘contracting out’. I would be prepared to go back to work to pay more national insurance, but I now look after my grandchildren.


The rules on how you qualify for state pension have changed for those reaching state pension age after April 2016.

You will never get less than you would have got under the old rules, but people who ‘contracted out’ of the old earnings-related state pension scheme (known as SERPs or the state second pension, S2P) may find that they don’t get the full new state pension.

How to boost your state pension

That is because they either paid a reduced rate of national insurance while they were working, or their national insurance was used to boost their work pension, which would then be higher to compensate for loss of the second state pension. Contracting out ended in 2016. Anyone unsure whether or not they were contracted out should ask their employer. Many people in the public sector – nurses, teachers, etc – were automatically contracted out.

Pension jargon buster

If you are in this position, as you have spotted, you may be able to top up your state pension further by continuing to work until you reach state pension age. But all is not lost if you have left your job.

A scheme called Specified Adult Childcare credits allows a grandparent (or other family member), who looks after a child whose mother or main carer has returned to work, to obtain national insurance credits – provided the child is under 12.

Find more information on Specified Adult Childcare credits at


Is my grandson allowed to drive my Motability vehicle when he comes to visit me?


Motability vehicle may be used only by or for the benefit of the disabled person whose name is on the contract. However, the rules do state that if you need someone to drive the car for you, you don’t need to be in the car yourself for every trip, and it is possible for other named drivers in the same household to use the car for shopping and running errands, as long as you, the disabled person, will benefit.

How to renew your Blue Badge

This means your grandson can’t simply borrow your car so that he can go off and see his friends, even with your consent. In addition, your insurance will cover only drivers listed as ‘permitted’ on your insurance certificate.

Can a Blue Badge holder park in a parent and child parking space?

Visit our Money section for money-saving tips, pension news and guides.

Try 12 issues of Saga Magazine for just £12

Subscribe today for just £12 for 12 issues...

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.