State Pension Forecast
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DWP is being very misleading in using the term 'full' NI. It actually means 'paid for full financial year', not necessarily 'full' for the new single tier pension.
If your OH was contracted out of SERPS from 1983 until 2005 (or later) then his State pension forecast does sound a bit on the high side... is he sure he was contracted out?0 -
Did you read point 1 before submitting your post, might just be me but I have absolutely no idea if you think it won't decrease or are concerned that it is the case that it will decrease?
Why do you think his latest forecast doesn't take it all into account. Opting out of SERPS has no effect whatsoever on the original basic state pension, that entitlement would still have built up each year and each year working (with NI which met the limits etc) would be another year banked towards the state pension.0 -
Silvertabby wrote: »DWP is being very misleading in using the term 'full' NI. It actually means 'paid for full financial year', not necessarily 'full' for the new single tier pension.
Uncertainty about the accuracy of DWP communications and its record-keeping is the root of my OP.
Could you explain the difference, please?If your OH was contracted out of SERPS from 1983 until 2005 (or later) then his State pension forecast does sound a bit on the high side... is he sure he was contracted out?
He says he's sure he did. The problem is he's in the broadcast industry, and although he worked at just one site when he was employed, as a result of the ITV franchise system he actually had three different employers over the years, all with their own schemes.0 -
Dazed_and_confused wrote: »Did you read point 1 before submitting your post, might just be me but I have absolutely no idea if you think it won't decrease or are concerned that it is the case that it will decrease?
Concerned that it will decrease.Why do you think his latest forecast doesn't take it all into account. Opting out of SERPS has no effect whatsoever on the original basic state pension, that entitlement would still have built up each year and each year working (with NI which met the limits etc) would be another year banked towards the state pension.
It's the SERPS element which is a concern. Some posters on earlier threads on this subject have said having opted out will reduce the SP, which I understand. However, given the time difference between the 2014 forecast and this recent one, I was hoping his contribution record, taking into account opting-out, would be up to date now.0 -
In DWP speak 'full' NI just means you have contributed for a full financial year, but that year only counts towards the new single tier pension if you paid the full rate of NI and not the reduced rate if you were contracted out.“ DWP is being very misleading in using the term 'full' NI. It actually means 'paid for full financial year', not necessarily 'full' for the new single tier pension.
Originally posted by Silvertabby ”
Uncertainty about the accuracy of DWP communications and its record-keeping is the root of my OP.
Could you explain the difference, please?
In my case, I was contracted out from 1978 until I retired in 2016, even though my DWP forecast says I have 40 years of 'full' NI contributions. My State pension will therefore be calculated under the old rules, as that is better than my (tiny !) State pension under the new rules.
It's not quite so clear cut for someone who has bits of contracted in/contracted out service, although their pension will still be the better of the old or new rules. As your OH's pension is more than the current single tier pension of £159 per week, he must be under the old rules - and I'm guessing that he must have been a relatively high earner to have accrued that rate of SERPS/SP2 (and that not all of his occupational pensions were actually contracted out).0 -
The OP's husband seems to have started work in the early seventies, before SERPS started in 1978 - he is likely to have a small amount of Graduated pension.
He was not contracted out into a DB pension until 1983 so will have some SERPS.
The DB Scheme was closed at some point and a DC pension was set up.
The OP's husband would have accrued SERPS/ S2P from that point.
The OP says that her husband was made redundant in 2005, not that the DB Scheme closed then.
Since then he has been freelancing.
The calculation at at 6 4 16 would have been £119.30 + (GRAD + SERPS/S2P - deduction for contracting out). (Old Rules)
£155.65 - COPE. (New Rules)
He would have received the higher of the two.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf
It would seem that his Grad/SERPS/S2P was high enough to wholly negate the Contracted Out Deduction.
For somebody who had not been contracted out at all, the old state pension could have been in excess of £280 a week at 6.4.16.
The OP's husband could ring DWP to check his situation.0 -
Yes, he was a high earner who started work before 1978.
As xylophone suggested, probably the best way forward would be to speak to the DWP in the hope of getting confirmation. The alternative is to go into our loft, which is currently as hot as Hades, and dig out his old paperwork.0 -
DancingBadger wrote: »Yes, he was a high earner who started work before 1978.
As xylophone suggested, probably the best way forward would be to speak to the DWP in the hope of getting confirmation. The alternative is to go into our loft, which is currently as hot as Hades, and dig out his old paperwork.
...and also check on the status of his occupational pension(s) while you're at it
......Gettin' There, Wherever There is......
I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple
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Can I just hijack this thread to ask one simple question?
I checked mine tonight. the one thing I did not understand is the number of years NI contributions you have to make. Mine shows I have already made 38 years of NI contributions, but tells me I have to make another 8 years before I will get the full pension. That's 46 years of NI contributions.
I am sure it used to only be 40 years required?0 -
At April 2016 the amount of years became a bit irrelevant and it was the amount you had accrued under either the old or new systems that mattered, the higher of the two being used. That amount is then taken away from the new maximum pension and the result determines how many further years contributions it will take to reach the full pension figure.Can I just hijack this thread to ask one simple question?
I checked mine tonight. the one thing I did not understand is the number of years NI contributions you have to make. Mine shows I have already made 38 years of NI contributions, but tells me I have to make another 8 years before I will get the full pension. That's 46 years of NI contributions.
I am sure it used to only be 40 years required?
The old pre 2010 scheme needed 44 years for men and 39 for women to reach the full basic pension. After then it was changed to 30 and in 2016 to 35 years. The 35 years though is only 100% relevant to those starting their working life from 2016 and everyone else will be part of a hybrid system.0
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