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  • FIRST POST
    • alfonso
    • By alfonso 8th Oct 16, 2:20 PM
    • 23Posts
    • 5Thanks
    alfonso
    New rules
    • #1
    • 8th Oct 16, 2:20 PM
    New rules 8th Oct 16 at 2:20 PM
    Just heard something on radio regarding state pension entitlement and possible top ups.
    So, I have checked the web site and im told my state pension starts in 2027 and at £155.65p.
    It also tells me an estimate of £119.79. ?/
    I have 35 yrs contributions and I retired at 50 with a final salary pension in 2010 and have paid no NI since then.
    Does having the 35 yrs mean I get the higher figure or do I need to top up ?
    The lower figure has confused me completely.
    Thanks in advance
    Alf
Page 1
    • molerat
    • By molerat 8th Oct 16, 3:13 PM
    • 15,018 Posts
    • 9,374 Thanks
    molerat
    • #2
    • 8th Oct 16, 3:13 PM
    • #2
    • 8th Oct 16, 3:13 PM
    The forecast tells you what they think you will get when you retire, a best case scenario.
    It then tells you what you currently have accrued.
    The next box tells you how much you can achieve and how many years contributions you need to get that amount.

    At April 16 a starting amount was calculated using the higher of either the "old" calculation of up to 30 years basic + additional pension or the "new" of up to 35 years - a contracted out deduction.

    If you have 35 years or more contributions and your current amount is less than £155.65 then you must have been contracted out, the contracted out deduction will be shown in one of the links, so the old calculation has been used. You can make up the pension to the max of £155.65 by employment or by paying post 2016 voluntary class 3 contributions, 155.65 - 119.79 = 35.86 / 4.45 = 8 years.
    Last edited by molerat; 08-10-2016 at 3:25 PM.
    www.helpforheroes.org.uk/donations.html
    • xylophone
    • By xylophone 8th Oct 16, 3:16 PM
    • 19,168 Posts
    • 10,881 Thanks
    xylophone
    • #3
    • 8th Oct 16, 3:16 PM
    • #3
    • 8th Oct 16, 3:16 PM
    It would appear that your "starting amount" is £119.79.

    You can make voluntary contributions to bring your SP up to the full new state pension.

    http://www.thisismoney.co.uk/money/pensions/article-3827421/Half-million-workers-state-pension-bargain-basement-rates.html

    https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

    http://forums.moneysavingexpert.com/showthread.php?t=5537740
    • plumduff55
    • By plumduff55 8th Oct 16, 3:19 PM
    • 329 Posts
    • 2,754 Thanks
    plumduff55
    • #4
    • 8th Oct 16, 3:19 PM
    • #4
    • 8th Oct 16, 3:19 PM
    Hi, I am completely confused by this as well.

    I checked last year before retiring and had 42 years contributions so I thought I would be eligible for the full state pension and retired in October.

    After hearing the clip on BBC this morning, I've just checked the pensions website that states I am eligible for £132.37 and would have to contribute till October 2021 (age 66) to receive the full pension.

    I am really shocked by this as I am using my savings to supplement my small NHS pension till age 66. I hope someone comes along soon that can explain this.

    Sorry for jug hijacking your thread Alfonso but this may explain your situation as well xx
    Last edited by plumduff55; 08-10-2016 at 3:21 PM. Reason: I was posting when the other answers were posted
    SPC 9 Member 045 Total 2016 £624.75
    • alfonso
    • By alfonso 8th Oct 16, 3:29 PM
    • 23 Posts
    • 5 Thanks
    alfonso
    • #5
    • 8th Oct 16, 3:29 PM
    • #5
    • 8th Oct 16, 3:29 PM

    Sorry for jug hijacking your thread Alfonso but this may explain your situation as well xx
    Originally posted by plumduff55
    No problem, we both in the same boat here.
    I was always under the impression that if I got 30yrs NI contributions in I would get a full state pension, I know it used to be 35 and has now reverted back to 35.
    If I was due to pay more NI I would have thought it could have been deducted at source along with tax from my monthly pension.
    • molerat
    • By molerat 8th Oct 16, 3:30 PM
    • 15,018 Posts
    • 9,374 Thanks
    molerat
    • #6
    • 8th Oct 16, 3:30 PM
    • #6
    • 8th Oct 16, 3:30 PM
    Hi, I am completely confused by this as well.

    I checked last year before retiring and had 42 years contributions so I thought I would be eligible for the full state pension and retired in October.

    After hearing the clip on BBC this morning, I've just checked the pensions website that states I am eligible for £132.37 and would have to contribute till October 2021 (age 66) to receive the full pension.

    I am really shocked by this as I am using my savings to supplement my small NHS pension till age 66. I hope someone comes along soon that can explain this.

    Sorry for jug hijacking your thread Alfonso but this may explain your situation as well xx
    Originally posted by plumduff55
    You will get a full SP - the "old" one that you would have got before the rules changed. You are now in the enviable situation of being able to purchase additional SP at fantastic rates, the equivalent of a 30% annuity - something that financial whizz kids could only dream of acheiving.
    www.helpforheroes.org.uk/donations.html
    • molerat
    • By molerat 8th Oct 16, 3:43 PM
    • 15,018 Posts
    • 9,374 Thanks
    molerat
    • #7
    • 8th Oct 16, 3:43 PM
    • #7
    • 8th Oct 16, 3:43 PM
    No problem, we both in the same boat here.
    I was always under the impression that if I got 30yrs NI contributions in I would get a full state pension, I know it used to be 35 and has now reverted back to 35.
    If I was due to pay more NI I would have thought it could have been deducted at source along with tax from my monthly pension.
    Originally posted by alfonso
    Pre 2010 men needed 44 years and women 39, this was changed to 30 and now to 35. As with all policy changes they hope to be cost neutral so there will always be winners and losers and to be honest both you and plumduff (and me) come out as winners. You will get what you always would have, you paid reduced NI, you have an occupational pension and you can purchase more SP at excellent rates.
    Last edited by molerat; 08-10-2016 at 3:47 PM.
    www.helpforheroes.org.uk/donations.html
    • plumduff55
    • By plumduff55 8th Oct 16, 3:46 PM
    • 329 Posts
    • 2,754 Thanks
    plumduff55
    • #8
    • 8th Oct 16, 3:46 PM
    • #8
    • 8th Oct 16, 3:46 PM
    So, am I right in thinking that the old pension ( before the rules changed ) was £132.37 and I will definitely get that. But I can pay the extra for the 6 years to bring me up to the new payment of £154.61.

    Thanks for your advice molerat xx
    SPC 9 Member 045 Total 2016 £624.75
    • alfonso
    • By alfonso 8th Oct 16, 4:43 PM
    • 23 Posts
    • 5 Thanks
    alfonso
    • #9
    • 8th Oct 16, 4:43 PM
    • #9
    • 8th Oct 16, 4:43 PM
    Forgive me in advance for having some dumb moments.
    Think I need a reboot of the brain here as the numbers aint adding up or I am reading the forecast wrong
    I have 35 years of full contributions
    11 years to contribute before 5 April 2026 ( at an average 700gbp/pa )

    5 years when I did not contribute enough (again 700gbp/pa )
    That would make 51yrs of contributions to get the new full SP
    • RoseV
    • By RoseV 8th Oct 16, 5:10 PM
    • 15 Posts
    • 1 Thanks
    RoseV
    Also confused
    The Breakdown of my pension states:

    Estimate based on your National Insurance record up to 5 April 2016
    £153.58 a week
    Forecast if you contribute another year before 5 April 2023
    £155.65 a week
    £155.65 is the most you can get


    It also states:
    Summary
    38 years of full contributions
    7 years to contribute before 5 April 2023
    4 years when you did not contribute enough

    I was a member of a final salary pension scheme prior to 1996.
    If I look at the COPE page it states:
    Contracted Out Pension Equivalent (COPE)

    Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.

    The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.

    Your COPE estimate is £56.75 a week.


    So does this mean I will only get paid £98.90 (£155.65 - £56.75) even though I will have paid in for 45 full years by the time I retire?

    Yours confusedly,

    Rose!
    • molerat
    • By molerat 8th Oct 16, 5:12 PM
    • 15,018 Posts
    • 9,374 Thanks
    molerat
    Forgive me in advance for having some dumb moments.
    Think I need a reboot of the brain here as the numbers aint adding up or I am reading the forecast wrong
    I have 35 years of full contributions
    11 years to contribute before 5 April 2026 ( at an average 700gbp/pa )

    5 years when I did not contribute enough (again 700gbp/pa )
    That would make 51yrs of contributions to get the new full SP
    Originally posted by alfonso
    It was the same before the 2016 changes, you could have 49 years of contributions - 16 to 65 - but only 30 of them counted for basic pension entitlement.

    Your pension will be a hybrid of old and new style with you being able to get the best of both worlds.
    www.helpforheroes.org.uk/donations.html
    • Triumph13
    • By Triumph13 8th Oct 16, 5:14 PM
    • 714 Posts
    • 656 Thanks
    Triumph13
    Forgive me in advance for having some dumb moments.
    Think I need a reboot of the brain here as the numbers aint adding up or I am reading the forecast wrong
    I have 35 years of full contributions
    11 years to contribute before 5 April 2026 ( at an average 700gbp/pa )

    5 years when I did not contribute enough (again 700gbp/pa )
    That would make 51yrs of contributions to get the new full SP
    Originally posted by alfonso
    You're mixing up lots of different things there. 2026 is when you get the state pension and if you were working then you would still be paying NI for another 11 years. As you're not, you won't be.
    The 5 years where you didn't contribute are happy as they are. Forget them completely as they would have made no difference to your pension at all as they were on the old SP and you already have the full old SP.
    You are now in the great position that another 8 years of voluntary NICs for years after April 2016 will bring you up to virtually the full new type SP.
    • molerat
    • By molerat 8th Oct 16, 5:21 PM
    • 15,018 Posts
    • 9,374 Thanks
    molerat
    The Breakdown of my pension states:

    Estimate based on your National Insurance record up to 5 April 2016
    £153.58 a week
    Forecast if you contribute another year before 5 April 2023
    £155.65 a week
    £155.65 is the most you can get


    It also states:
    Summary
    38 years of full contributions
    7 years to contribute before 5 April 2023
    4 years when you did not contribute enough

    I was a member of a final salary pension scheme prior to 1996.
    If I look at the COPE page it states:
    Contracted Out Pension Equivalent (COPE)

    Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.

    The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.

    Your COPE estimate is £56.75 a week.


    So does this mean I will only get paid £98.90 (£155.65 - £56.75) even though I will have paid in for 45 full years by the time I retire?

    Yours confusedly,

    Rose!
    Originally posted by RoseV
    You have currently accrued £153.58 and as you have a COPE shown this will be what you had under the old system and nothing will reduce this amount. The maximum you can achieve is £155.65 no matter how many more years you contribute for. Working for this year will take your pension entitlement up to that maximum of £155.65


    The COPE figure was only used to calculate the starting amount at April 2016 which was the higher of :

    Old 30 = £119.30 + additional pension of £34.28 = £153.58
    or
    New 35 = £155.65 - COPE of £56.75 = £98.90
    www.helpforheroes.org.uk/donations.html
    • RoseV
    • By RoseV 8th Oct 16, 5:26 PM
    • 15 Posts
    • 1 Thanks
    RoseV
    So it looks like you are saying that, as I am working this year, I will receive the full £155.65?

    Phew! And thanks!

    I was suddenly worrying about reworking my retirement plans!

    Rose :-)
    • zagfles
    • By zagfles 8th Oct 16, 5:49 PM
    • 11,107 Posts
    • 9,123 Thanks
    zagfles
    The thing to remember is that you haven't got 35 "full years" if you were ever contracted out - most final salary schemes were contracted out - you and your employer paid reduced NI in return for replacing part of the state pension with your employer's pension.

    As above a quirk in the new rules is that you're allowed to make up that part of the state pension replaced by the employer's pension, by paying NI between now and state pension age. So you can have your cake and eat it, sort of!
    • bigfreddiel
    • By bigfreddiel 8th Oct 16, 7:10 PM
    • 4,075 Posts
    • 1,863 Thanks
    bigfreddiel
    Hi, I am completely confused by this as well.

    I checked last year before retiring and had 42 years contributions so I thought I would be eligible for the full state pension and retired in October.

    After hearing the clip on BBC this morning, I've just checked the pensions website that states I am eligible for £132.37 and would have to contribute till October 2021 (age 66) to receive the full pension.

    I am really shocked by this as I am using my savings to supplement my small NHS pension till age 66. I hope someone comes along soon that can explain this.

    Sorry for jug hijacking your thread Alfonso but this may explain your situation as well xx
    Originally posted by plumduff55
    What exactly did you check last year?

    If it was your pension amount how could you be shocked, surely you already knew?

    Cheers fj
    • plumduff55
    • By plumduff55 8th Oct 16, 7:14 PM
    • 329 Posts
    • 2,754 Thanks
    plumduff55
    The thing to remember is that you haven't got 35 "full years" if you were ever contracted out - most final salary schemes were contracted out - you and your employer paid reduced NI in return for replacing part of the state pension with your employer's pension.

    As above a quirk in the new rules is that you're allowed to make up that part of the state pension replaced by the employer's pension, by paying NI between now and state pension age. So you can have your cake and eat it, sort of!
    Originally posted by zagfles
    Thank you zagfles - you've explained my query re the years contributions paid. I did not realise that I was contracted out but now it makes sense. I'll get in touch with pensions next week and probably pay monthly. Many thanks
    SPC 9 Member 045 Total 2016 £624.75
    • plumduff55
    • By plumduff55 8th Oct 16, 7:17 PM
    • 329 Posts
    • 2,754 Thanks
    plumduff55
    What exactly did you check last year?

    If it was your pension amount how could you be shocked, surely you already knew?

    Cheers fj
    Originally posted by bigfreddiel
    Hi, I wrote to pensions and was advised I had 42 years contributions paid. I knew that I needed 35 years contributions and wrongly surmised I would be entitled to the full flat rate of pension when I reached 66. I did not even know I was contracted out. But thanks to zagfles helpful reply I now understand.
    SPC 9 Member 045 Total 2016 £624.75
    • Apollonia
    • By Apollonia 9th Oct 16, 3:55 PM
    • 370 Posts
    • 912 Thanks
    Apollonia
    Royal London published a booklet online yesterday that may be useful to the posters here. The link takes you to a page where you can download the pdf - Topping up your State Pension.

    http://www.royallondon.com/about/media/good-with-your-money/
    • fifeken
    • By fifeken 9th Oct 16, 5:43 PM
    • 2,027 Posts
    • 1,046 Thanks
    fifeken
    I thought I'd got a handle on this but the OP has given me some doubts.

    My record on the .gov.uk website says 37 years of full contributions, from 16 years old until now (no breaks or missing years). It also says I was contracted out for some of that time (which I knew) and gives a forecast of £156.57 per year, just above the OPs. Cope estimate of £51.15 per month.

    I thought this meant I was under the old system, but had enough time when I was contracted in to give me additional pension of £37.27 giving me the sum mentioned.

    Can someone confirm or point out where I'm going wrong?
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