State pension for self employed

beezkneez
beezkneez Posts: 129
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Hi

I am confused as to how the state pension will work out for me

Since 1987 I have been employed and then part time employed and self employed

My HMRC retirement year is 2038

I have checked online and my NI contributions say 'full year' for all but 2 which say 'year not full' this was from when I was studying and so far back that I can't top them up

I think before 2016 people got a basic state pension and it also get topped up through S2P. I may be wrong....

I think this then changed and I will fall into this new plan. What is the most everyone will be able to get from the state in the future so in my case 2038?

My online prediction is £155.65 if I pay in 6 more years. Is this the same for someone retiring at the same time as me who is employed? Or is there a way of boosting the state pension

My accountant sorts out my tax declaration each year and I just pay what they tell me too. I'm not a limited company

My partner is self employed so I can't use him as a comparison

Your thoughts are appreciated. I just want to be sure I'm heading in the right direction

Thanks
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  • OldMusicGuy
    OldMusicGuy Posts: 1,752
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    It changed in 2016, everyone gets the same if you retire after April 2016 provided you have 35 years NI contributions. If you have less than 35 years, you get a proportion of the full amount. There's a good explanation on main the MSE site (I'm new here so I can't post a link).

    That's why there's a bit of a hoo-hah over the NI contributions going up for the self-employed at the moment. If everyone gets the same pension, Hammond's logic is that the NI contributions should be similar for employed and self employed. But it doesn't seem to have gone down too well......
  • p00hsticks
    p00hsticks Posts: 12,672
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    It changed in 2016, everyone gets the same if you retire after April 2016 provided you have 35 years NI contributions.

    This isn't true at present. There are transitional rules in place which means that some people who have built up additional entitlement under the old rules may get more than the £155.65 new rules maximum, whilst other will get less despite having more than 35 years NI.

    The Pension Service has worked out what State Pension people would be entitled to under both the old rules and the new rules as at 6/4/16, and the higher of the two amounts becomes your 'starting amount.

    If this amount is more than £155.65, this is what you will get, but you can't add to it further.

    If the amount is less than £155.65, then every additional NI year added from 2016 will incrase your starting amount by around £4.45 (1/35th of £155.65) until you either reach State Pension Age or you reach the maximum £155.65.
  • xylophone
    xylophone Posts: 44,140
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    My online prediction is £155.65

    You have been given your "starting amount" as at 6 4 16.

    https://www.gov.uk/new-state-pension/how-its-calculated

    If you continue to contribute for another six years, you will reach full NSP.
  • beezkneez
    beezkneez Posts: 129
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    edited 11 March 2017 at 11:27PM
    Has the opting in and out stopped now?

    This is so complicated!

    I have another pension too and I can't remember if I opted out of it!

    Retirement seemed like a lifetime away when I took it out years ago!
  • xylophone
    xylophone Posts: 44,140
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    Has the opting in and out stopped now?

    Do you mean "contracting out"?

    This ended for DC Schemes in 2012 and for DB Schemes in 2016.

    http://www.legalandgeneral.com/library/pensions/technical-information/Abolution_CO_Rights.pdf

    https://www.sackers.com/publication/abolition-of-db-contracting-out-countdown-to-april-2016/

    Does your new state pension statement mention a COPE?
  • OldMusicGuy
    OldMusicGuy Posts: 1,752
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    edited 12 March 2017 at 10:37AM
    p00hsticks wrote: »
    This isn't true at present. There are transitional rules in place which means that some people who have built up additional entitlement under the old rules may get more than the £155.65 new rules maximum, whilst other will get less despite having more than 35 years NI.

    The Pension Service has worked out what State Pension people would be entitled to under both the old rules and the new rules as at 6/4/16, and the higher of the two amounts becomes your 'starting amount.

    If this amount is more than £155.65, this is what you will get, but you can't add to it further.

    If the amount is less than £155.65, then every additional NI year added from 2016 will incrase your starting amount by around £4.45 (1/35th of £155.65) until you either reach State Pension Age or you reach the maximum £155.65.

    My bad, I misread the original post and missed the part where they said they had been employed. Quite right, contributions prior to 2016 are taken into account. If you stayed "opted in" prior to this date you may get more. However, I would assume the online prediction would take this into account, mine does. I was "opted out" of S2P in my DC schemes when it was fashionable but later decided to opt back in. Glad I did as this means my state pension forecast is now over 10,100 per annum.
  • beezkneez
    beezkneez Posts: 129
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    xylophone wrote: »
    Do you mean "contracting out"?

    This ended for DC Schemes in 2012 and for DB Schemes in 2016.

    http://www.legalandgeneral.com/library/pensions/technical-information/Abolution_CO_Rights.pdf

    https://www.sackers.com/publication/abolition-of-db-contracting-out-countdown-to-april-2016/

    Does your new state pension statement mention a COPE?

    I can't see COPE on the online quote
  • xylophone
    xylophone Posts: 44,140
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    https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

    If there is no COPE then it would appear that you have never been contracted out?

    Your "starting amount " would then be the higher of (new rules) 29/35 x £155.65 (£128.96) or (old rules) 29/30 x £119.30) + any SERPS/S2P earned between 1987 and 2016.
  • molerat
    molerat Posts: 31,699
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    The on line forecast will clearly state if you were contracted out and give a COPE amount in a link from that statement so if there is no mention then you were never contracted out.
  • Kynthia
    Kynthia Posts: 5,665
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    molerat wrote: »
    The on line forecast will clearly state if you were contracted out and give a COPE amount in a link from that statement so if there is no mention then you were never contracted out.

    I have definitely been contracted out fir over ten years. However when I logged on yesterday my forecast had no mention of COPE and there was no mention of being contracted out, for how long or when. I don't know if they've changed the site, but I was definitely on the right page as it had my current and forecasted state pension and the breakdown of full NI years.
    Don't listen to me, I'm no expert!
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