Contracted out pension
Comments
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http://forums.moneysavingexpert.com/showthread.php?t=5439410&page=10
See post 187 - have you obtained a new state pension forecast?
No - not fot a few years0 -
That is what you need to do straight away then, easy to do on line. Without more information all the comments here are speculation, too many factors are involved to give accurate help. Pre 2016 "years" become a bit irrelevant if you had contracted out service, it is the £s that count at April 2016.No - not fot a few years0 -
OP, this is a super guide. Work through the flowchart that applies to you. http://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
Using gov.ukVerify, you can get your state pension forecast this afternoon
https://www.tax.service.gov.uk/check-your-state-pension.0 -
Don't just do as some have written and buy enough past years to get you to 35 years. The money could well get you no increase at all.
The reason for this is the foundation amount calculation. This calculates your entitlement as of 6 April 2016 using both old rules and new rules and uses the highest one. For a person who has been contracted out a lot that will normally mean the old rules calculation. Which tops out at 30 year for the basic state pension portion that buying years can add to. And you already have 30 years.
From 6 April 2016 each new year of paying in or buying years with dates of 2016-17 and later (but not earlier years!) will add 1/35th of the flat rate until the flat rate cap level is reached.
The 2015-16 tax year will be included in calculations around November or December this year. So get a statement after that is included and you'll be able to work out how many 2016-17 and later years you'll need to get to the flat rate cap.
Overall you're in a great position because you are able to get both the non-state pension that your contracting out helped to pay for and the maximum possible flat rate pension, while someone who didn't contract out couldn't.0 -
I am wondering whether it is possible to make extra contributions to cover the difference between my "Contracted out" state pension and the pension that I would have received, had I not been "contracted out" ?
The 'difference' between a contracted out and contracted in state pension is your occupational pension.
There would be nothing to gain by 'buying' more state pension.
You may as well just buy more 'occupational' pension, or just not bother, it's up to you.
You may want to see an IFA, who will know better than us on this board.
Good luck fj0 -
What will normally happen is that you will get a letter from DWP saying you haven't qualified this year. You can then buy the year at a relatively cheap price. If you're told it's been partly paid for that's the best deal and just buy then.Easier said than done
They won't increase my hours
If you'd have to pay full price you can instead think about what you might do in the future about work. If you think you might end up in a job where you would get NI contributions, do nothing now and let that job take care of getting you qualifying years. In this case, just start to buy when you can't afford to miss any years and still get to the full flat rate level.
Getting to the full flat rate matters, but you appear to have a fair bit of time for things to change before you are forced to buy 2016 and later years to get to the maximum.0 -
bigfreddiel wrote: »The 'difference' between a contracted out and contracted in state pension is your occupational pension.
There would be nothing to gain by 'buying' more state pension.
I have two contracted out occupational pensions. My current state pension forecast is just over £120 per week.
I intend to retire early next year. If I purchase another 6 years of Class 3 NICs my SP is forecast to be just over £147 per week at current rates when I reach 66.
How is that "nothing to gain"?0 -
Probably nothing for 50Twuncle to gain by buying years from 2015-16 and earlier because 30 years of the earlier ones are already present and more won't increase the foundation amount calculation. But gain from buying 2016-17 and later.
In the Deneb case buying 2016-17 and later years also looks like a good move. Maybe earlier years if available and if 30 years from 2015-16 and earlier aren't present.
This post is only for those who had a lot of time contracted out, where we can be confident that the old rules calculation with 30 years for maximum basic state pension is being used for the foundation amount.0 -
What will normally happen is that you will get a letter from DWP saying you haven't qualified this year. You can then buy the year at a relatively cheap price. If you're told it's been partly paid for that's the best deal and just buy then.
Never had any letter from DWP telling me whether I have qualified or not - in 36 years of employment !!0
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