New State Pension Guide

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Comments

  • xylophone
    xylophone Posts: 44,398 Forumite
    Name Dropper First Anniversary First Post
    Your husband should obtain a new state pension statement.

    What is your "starting amount"?

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/512799/your-state-pension-statement-explained-dwp042.pdf

    Is the predicted pension £155.72 on the basis that you will continue to contribute up to your SPA?

    See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

    The figures are outdated - the BSP uprated for 2016-17 is £119.30 and the full NSP £155.65.

    For RDA read COPE.
  • lakelady
    lakelady Posts: 51 Forumite
    First Anniversary Combo Breaker
    xylophone wrote: »

    What is your "starting amount"?

    I don't know how to work this out, and it doesn't seem to say what it is on the HMRC website.

    Is the predicted pension £155.72 on the basis that you will continue to contribute up to your SPA?

    Yes, that's what it says on the website; but as it includes £54.76 COPE, I assumed that I will actually get £100.89 if I continue to pay NI until SPA. Is this not the case?

    Thank you for your help, and sorry if I am being irritatingly obtuse.
  • molerat
    molerat Posts: 31,851 Forumite
    Name Dropper Photogenic First Post First Anniversary
    edited 31 August 2016 at 5:56PM
    lakelady wrote: »
    It says
    Breakdown:
    Estimate based on your NI contributions to 5 April 2016 £125.72 your starting amount and what you will receive if you make no more contributions

    Forecast if you contribute another 7 years before 5 April 2024 £155.65 what you will receive if you contribute another 7 years

    and following the hyperlink tell me that the COPE amount is £54.76. of no real relevance any more as it is only used when working out your starting amount. It is only an indication of what your savings from the reduced NI contributions should have bought from wherever they were invested.
    The starting amount is the higher of the new (35 years - COPE) or the old (30 years + S2P/Grad/SERPS), in your case the old figure is the higher.
  • lakelady
    lakelady Posts: 51 Forumite
    First Anniversary Combo Breaker
    Many thanks. That now makes sense :)
  • xylophone
    xylophone Posts: 44,398 Forumite
    Name Dropper First Anniversary First Post
    edited 31 August 2016 at 6:03PM
    Have a read through the links.

    Two calculations have been done, one being what you would have received under the old system and the other what you would receive under the new.

    In your case the "old" gives you the higher amount, £125.72 as opposed to the "new" £100.86.

    Therefore your starting amount is £125.72.

    Each year of contribution paid or credited from now on will improve your state pension by about £4.45 a week ( until you reach £155.65) - that explains the reference to seven years.

    If you give up work at ( 58-60) as you indicate you can consider making voluntary contributions.

    In addition to the state pension you will receive your occupational/private pension which may be more, less or equal to the COPE.
  • NorthernMonkey1
    NorthernMonkey1 Posts: 350 Forumite
    First Anniversary First Post Combo Breaker Mortgage-free Glee!
    Can someone doublecheck these numbers for me please...

    I'm 37, born in 1979, started work in 1999, but almost immediately contracted out.

    My likely starting amount from 2016 is going to be (17/30) x 119.30 = 67.60

    In order to get the full new amount, I need to work for another

    (155.65-67.60) / (155.65 / 35)

    = 88.05 / 4.45

    = 19 1/2 years (give or take)



    SO if I make full NI contributions for the next 20 out of the next 31 years, I'll get the full nsp at 68 (assuming that something else hasn't changed in the interim)
  • molerat
    molerat Posts: 31,851 Forumite
    Name Dropper Photogenic First Post First Anniversary
    edited 1 September 2016 at 2:56PM
    You need to get a forecast to get your starting amount as I doubt you will have only 17 years basic pension, you most likely have some SERPS/S2P accrued. There is also the addition of 3 years credits from when you were 16-18. Your method of calculating the required years is correct though.
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
    molerat wrote: »
    You need to get a forecast to get your starting amount as I doubt you will have only 17 years basic pension, you most likely have some SERPS/S2P accrued. There is also the addition of 3 years credits from when you were 16-18. Your method of calculating the required years is correct though.

    But Monkey said 'almost immediately contracted out.' So the amount of SERPS will be virtually zero surely. Anyway not enough to be worth much, maybe a couple of quid a week!

    Cheers fj
  • minty777
    minty777 Posts: 398 Forumite
    First Anniversary Name Dropper First Post Photogenic
    Don't you get some S2P even if you were contracted out depending on your earnings?
  • jamesd
    jamesd Posts: 26,103 Forumite
    Name Dropper First Post First Anniversary
    Yes, S2P had a bit of additional pension even when contracted out. Might cut a year or two off the number of years required to get to the flat rate cap.
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