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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 2
    • zagfles
    • By zagfles 9th Oct 16, 5:59 PM
    • 11,107 Posts
    • 9,123 Thanks
    zagfles
    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?
    Originally posted by fifeken
    Why do you think you're going wrong? It sounds like you have enough in SERPS/S2P to take your "old rules" amount above the new full state pension.
    • bigfreddiel
    • By bigfreddiel 9th Oct 16, 6:17 PM
    • 4,063 Posts
    • 1,859 Thanks
    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.
    Originally posted by plumduff55
    Ah, I see a common mistake, presumably you have a nice pension from your workplace while you were contracted out. And don't forget you paid less NI contributions while contracted out, so you haven't lost out, in fact your workplace pension is probably better than the extra state pension is

    Good luck fj
    • molerat
    • By molerat 9th Oct 16, 6:53 PM
    • 15,015 Posts
    • 9,367 Thanks
    molerat
    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?
    Originally posted by fifeken
    As long as you are quoting the correct figures.

    There are 3 boxes on the forecast.
    Top - what they estimate your pension will be providing certain things happen.
    Middle - what you currently have accrued at April 2016 (or sometimes still April 15)
    Bottom - again what they think you will get if you contribute x years or states that you cannot increase any more.

    If the NI figure is up to April 15 then the estimates may be incorrect.

    The middle box is the important one for now.
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    • fifeken
    • By fifeken 9th Oct 16, 7:09 PM
    • 2,027 Posts
    • 1,046 Thanks
    fifeken
    Why do you think you're going wrong? It sounds like you have enough in SERPS/S2P to take your "old rules" amount above the new full state pension.
    Originally posted by zagfles
    Nothing specific, but I've been in company pension schemes all my life so wasn't really expectings SERPS/S2P to chip in.

    As long as you are quoting the correct figures.

    There are 3 boxes on the forecast.
    Top - what they estimate your pension will be providing certain things happen.
    Middle - what you currently have accrued at April 2016 (or sometimes still April 15)
    Bottom - again what they think you will get if you contribute x years or states that you cannot increase any more.

    If the NI figure is up to April 15 then the estimates may be incorrect.

    The middle box is the important one for now.
    Originally posted by molerat
    Only one box and based on record up to 2016. The box says my forecast is £156.67 per week. Further down it says it cannot be improved.
    • bigfreddiel
    • By bigfreddiel 9th Oct 16, 7:51 PM
    • 4,063 Posts
    • 1,859 Thanks
    bigfreddiel
    Nothing specific, but I've been in company pension schemes all my life so wasn't really expectings SERPS/S2P to chip in.



    Only one box and based on record up to 2016. The box says my forecast is £156.67 per week. Further down it says it cannot be improved.
    Originally posted by fifeken
    Sounds good to me, I was surprised that I had some SERPS/S2P in my forecast as well. Now getting my SP, and it was within a few pounds of the forecast.

    Cheers fj
    • zagfles
    • By zagfles 9th Oct 16, 7:55 PM
    • 11,107 Posts
    • 9,123 Thanks
    zagfles
    Nothing specific, but I've been in company pension schemes all my life so wasn't really expectings SERPS/S2P to chip in.
    Originally posted by fifeken
    Not all company schemes were contracted out. Also it was possible to get SERPS/S2P accrual even while in a contracted out scheme.
    • fifeken
    • By fifeken 11th Oct 16, 8:56 PM
    • 2,027 Posts
    • 1,046 Thanks
    fifeken
    Not all company schemes were contracted out. Also it was possible to get SERPS/S2P accrual even while in a contracted out scheme.
    Originally posted by zagfles
    I was definitely contracted out for several years. How would I know if I was still getting SERPS/S2P during a contracted out period?
    • Silvertabby
    • By Silvertabby 11th Oct 16, 9:04 PM
    • 369 Posts
    • 393 Thanks
    Silvertabby
    “ Not all company schemes were contracted out. Also it was possible to get SERPS/S2P accrual even while in a contracted out scheme.
    Originally posted by zagfles
    I was definitely contracted out for several years. How would I know if I was still getting SERPS/S2P during a contracted out period?
    You may get a bit of S2P top up for the period 2002 to 2016 if you were on low to moderate pay.

    I was contracted out from day 1 (April 1978) until I retired earlier this year. I've just requested a full State pension forecast (SPA is 66) and I'm curious to see what S2P top up I'll get, if any. I worked part time from 2003 until I retired, so I'm assuming that I will be classed as low(ish) paid. Whatever it is, I will still consider anything over the old basic State pension of £119 per week to be a bonus.
    • zagfles
    • By zagfles 11th Oct 16, 10:49 PM
    • 11,107 Posts
    • 9,123 Thanks
    zagfles
    You may get a bit of S2P top up for the period 2002 to 2016 if you were on low to moderate pay.

    I was contracted out from day 1 (April 1978) until I retired earlier this year. I've just requested a full State pension forecast (SPA is 66) and I'm curious to see what S2P top up I'll get, if any. I worked part time from 2003 until I retired, so I'm assuming that I will be classed as low(ish) paid. Whatever it is, I will still consider anything over the old basic State pension of £119 per week to be a bonus.
    Originally posted by Silvertabby
    Yes you get some S2P post 2002 even if contracted out if your earnings were below the "secondary earnings threshold" which was £34,300 last year, see here for previous years: http://adviser.royallondon.com/pensions/technical-central/rates-and-factors/ni-limits/low-and-secondary-earnings-thresholds/

    Also pre 1997 you accrued SERPS whether contracted out or not - but if contracted out a "contracted out deduction" (COD) was applied. This was usually the same as SERPS but there were some circumstances where they'd be different, eg deferred pensions
    • Silvertabby
    • By Silvertabby 12th Oct 16, 12:38 PM
    • 369 Posts
    • 393 Thanks
    Silvertabby
    “ You may get a bit of S2P top up for the period 2002 to 2016 if you were on low to moderate pay.

    I was contracted out from day 1 (April 1978) until I retired earlier this year. I've just requested a full State pension forecast (SPA is 66) and I'm curious to see what S2P top up I'll get, if any. I worked part time from 2003 until I retired, so I'm assuming that I will be classed as low(ish) paid. Whatever it is, I will still consider anything over the old basic State pension of £119 per week to be a bonus.
    Originally posted by Silvertabby
    Yes you get some S2P post 2002 even if contracted out if your earnings were below the "secondary earnings threshold" which was £34,300 last year, see here for previous years: http://adviser.royallondon.com/pensions/technical-central/rates-and-factors/ni-limits/low-and-secondary-earnings-thresholds/

    Also pre 1997 you accrued SERPS whether contracted out or not - but if contracted out a "contracted out deduction" (COD) was applied. This was usually the same as SERPS but there were some circumstances where they'd be different, eg deferred pensions
    Thanks Zagflies. I was in the Armed Forces from 1978 until 2000, so I've been drawing that pension for some time now. Looks like I may get a bit of top up for post 2002 service though - bargain!
    • Triumph13
    • By Triumph13 12th Oct 16, 2:54 PM
    • 714 Posts
    • 656 Thanks
    Triumph13
    I was contracted out from day 1 (April 1978) until I retired earlier this year. I've just requested a full State pension forecast (SPA is 66) and I'm curious to see what S2P top up I'll get, if any. I worked part time from 2003 until I retired, so I'm assuming that I will be classed as low(ish) paid. Whatever it is, I will still consider anything over the old basic State pension of £119 per week to be a bonus.
    Originally posted by Silvertabby
    I would enquire if you had time to get up to the full £155.65 by paying a few years of voluntary NICs as you'd only have to live to 70 to be quids in, but as it's rude to ask a Lady's age I won't.
    • Silvertabby
    • By Silvertabby 12th Oct 16, 6:07 PM
    • 369 Posts
    • 393 Thanks
    Silvertabby
    “ I was contracted out from day 1 (April 1978) until I retired earlier this year. I've just requested a full State pension forecast (SPA is 66) and I'm curious to see what S2P top up I'll get, if any. I worked part time from 2003 until I retired, so I'm assuming that I will be classed as low(ish) paid. Whatever it is, I will still consider anything over the old basic State pension of £119 per week to be a bonus.
    Originally posted by Silvertabby
    I would enquire if you had time to get up to the full £155.65 by paying a few years of voluntary NICs as you'd only have to live to 70 to be quids in, but as it's rude to ask a Lady's age I won't.
    Triumph - what a gent! I'm 60 and a bit, and don't intend to take up any further paid employment. I'm seriously considering the voluntary NICs, but not until I'm nearer 66 - don't see any point in paying now, as I'd be giving up my capital without any return.
    • Lorrie65
    • By Lorrie65 12th Oct 16, 6:11 PM
    • 1 Posts
    • 0 Thanks
    Lorrie65
    Qualifying Years Lost Under New System
    I am new to forums so please excuse me if I am not following the correct procedure. I made a startling discovery which I think (and I hope I'm wrong and someone can correct me) that you lose any qualifying years over 30 when switching to the new system?? I am a 51 year old woman. I recently got a state pension forecast which told me I had 31 qualifying years and would receive £131.48 a week with an estimated COPE amount of £30.08. I queried the number of qualifying years and was awarded an extra year. However, on getting an updated forecast the estimate hadn't changed. I queried this with the Pension Helpline. They explained that calculations showed I would have been better off under the old system and had therefore been awarded a starting amount based on what I would have received under the old system. They explained that the maximum qualifying years I could earn under the old system was 30, so gaining the extra year had, in fact, been pointless. In 2014/15 I had a part year which would cost around £282 to make a full qualifying year but I was advised against doing this as it would not improve my state pension. To improve it and get a full state pension, as I have no intention of returning to work, I have to make voluntary contributions to buy another 6 years in the new system at a current cost of £733.20 a year. Those two extra qualifying years I had under the old system are lost. I cannot transfer these to the new system. Can anyone verify this? If so, it sort of explains a couple of other forum users dilemmas as well.
    • roxy28
    • By roxy28 12th Oct 16, 6:26 PM
    • 568 Posts
    • 57 Thanks
    roxy28
    I'm seriously considering the voluntary NICs, but not until I'm nearer 66 - don't see any point in paying now, as I'd be giving up my capital without any return.
    Originally posted by Silvertabby
    Dad is the same age as you and was thinking the same, but if leaving it so late to pay VC, is it possible class 3 may cost more than the £14.10p per week at present so adding to the cost?

    Also can you only pay one tax year at at time which would rule out paying a lump sum for say 3/4 years all at once? close to your SP date.
    Last edited by roxy28; 12-10-2016 at 6:33 PM.
    • molerat
    • By molerat 12th Oct 16, 6:28 PM
    • 15,015 Posts
    • 9,367 Thanks
    molerat
    I am new to forums so please excuse me if I am not following the correct procedure. I made a startling discovery which I think (and I hope I'm wrong and someone can correct me) that you lose any qualifying years over 30 when switching to the new system?? I am a 51 year old woman. I recently got a state pension forecast which told me I had 31 qualifying years and would receive £131.48 a week with an estimated COPE amount of £30.08. I queried the number of qualifying years and was awarded an extra year. However, on getting an updated forecast the estimate hadn't changed. I queried this with the Pension Helpline. They explained that calculations showed I would have been better off under the old system and had therefore been awarded a starting amount based on what I would have received under the old system. They explained that the maximum qualifying years I could earn under the old system was 30, so gaining the extra year had, in fact, been pointless. In 2014/15 I had a part year which would cost around £282 to make a full qualifying year but I was advised against doing this as it would not improve my state pension. To improve it and get a full state pension, as I have no intention of returning to work, I have to make voluntary contributions to buy another 6 years in the new system at a current cost of £733.20 a year. Those two extra qualifying years I had under the old system are lost. I cannot transfer these to the new system. Can anyone verify this? If so, it sort of explains a couple of other forum users dilemmas as well.
    Originally posted by Lorrie65
    You are mis understanding how it works.

    At April 16 you were given a starting amount which is the higher of your entitlement under the old or new systems, you have not lost anything and the April 16 amount is at least what you would have received if the system had not changed. Those extra years over 30 did not count under the old system anyway.

    Your starting amount is the higher of 30 x £3.98 = £119.30 + additional pension of £12.18 = £131.48 or 31 x 4.25 = £131.75 - COPE of £30.48 = £101.27 meaning you are better off using the old system calculation. You are now able to increase that amount with voluntary contributions (or by working), very good value for money and something you would not have been able to do under the old system.
    Last edited by molerat; 12-10-2016 at 6:55 PM.
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    • Silvertabby
    • By Silvertabby 12th Oct 16, 7:19 PM
    • 369 Posts
    • 393 Thanks
    Silvertabby
    “ I'm seriously considering the voluntary NICs, but not until I'm nearer 66 - don't see any point in paying now, as I'd be giving up my capital without any return.
    Originally posted by Silvertabby
    Dad is the same age as you and was thinking the same, but if leaving it so late to pay VC, is it possible class 3 may cost more than the £14.10p per week at present so adding to the cost?

    Also can you only pay one tax year at at time which would rule out paying a lump sum for say 3/4 years all at once? close to your SP date.
    Last edited by roxy28; Today at 5:33 PM.
    Thanks Roxy - I thought I would be able to pay 3 or 4 years all at once. Will see what my actual State pension forecast is and look at my options.
    Last edited by Silvertabby; 13-10-2016 at 12:36 PM. Reason: typo
    • molerat
    • By molerat 12th Oct 16, 8:44 PM
    • 15,015 Posts
    • 9,367 Thanks
    molerat
    Dad is the same age as you and was thinking the same, but if leaving it so late to pay VC, is it possible class 3 may cost more than the £14.10p per week at present so adding to the cost?

    Also can you only pay one tax year at at time which would rule out paying a lump sum for say 3/4 years all at once? close to your SP date.
    Originally posted by roxy28
    For post 2016 years you can pay at the historical rate for the year up until 2 years after the end of the year concerned, for 2016-17 you must pay before 5 April 2019. After that they are charged at the current amount for the year you are paying them in up until 6 years after the end of the year, again for 2016-17 by April 5 2023. You can pay as many years, within those time limits and before your SP date, as you have the cash for in one go.
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    • fifeken
    • By fifeken 12th Oct 16, 8:56 PM
    • 2,027 Posts
    • 1,046 Thanks
    fifeken
    Yes you get some S2P post 2002 even if contracted out if your earnings were below the "secondary earnings threshold" which was £34,300 last year, see here for previous years: http://adviser.royallondon.com/pensions/technical-central/rates-and-factors/ni-limits/low-and-secondary-earnings-thresholds/

    Also pre 1997 you accrued SERPS whether contracted out or not - but if contracted out a "contracted out deduction" (COD) was applied. This was usually the same as SERPS but there were some circumstances where they'd be different, eg deferred pensions
    Originally posted by zagfles
    None of this seems to apply to me so I still can't fathom why I've got as much additional pension under the old rules as I have. I don't really need to understand it, but it niggles me that I don't.
    • zagfles
    • By zagfles 12th Oct 16, 10:43 PM
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    • 9,123 Thanks
    zagfles
    None of this seems to apply to me so I still can't fathom why I've got as much additional pension under the old rules as I have. I don't really need to understand it, but it niggles me that I don't.
    Originally posted by fifeken
    You'll probably find that some of your company pension wasn't contracted out. The FS scheme I'm in was contracted in initially then contracted out in the late 80's, so people who started in the 70's do have a lot in SERPS, and SERPS is revalued with earnings not inflation so early years SERPS can be quite significant.
    • xylophone
    • By xylophone 12th Oct 16, 10:46 PM
    • 19,152 Posts
    • 10,870 Thanks
    xylophone
    None of this seems to apply to me
    Your starting (foundation) amount for NSP will be the higher of your entitlement when calculated under old and new rules.

    You appear to have started work age 16 in around 1979.

    You have 37 years of contributions.

    You were contracted out for only some of those years.

    It would appear therefore that AP accrued in your contracted in years (together with what you may have accrued under S2P even if contracted out) was high enough to give you a foundation (starting) amount slightly in excess of full NSP even after the Contracted Out Deduction.

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