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  • FIRST POST
    • beezkneez
    • By beezkneez 11th Mar 17, 8:55 PM
    • 90Posts
    • 36Thanks
    beezkneez
    State pension for self employed
    • #1
    • 11th Mar 17, 8:55 PM
    State pension for self employed 11th Mar 17 at 8:55 PM
    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
    Last edited by beezkneez; 11-03-2017 at 9:51 PM.
Page 1
    • OldMusicGuy
    • By OldMusicGuy 11th Mar 17, 10:01 PM
    • 201 Posts
    • 367 Thanks
    OldMusicGuy
    • #2
    • 11th Mar 17, 10:01 PM
    • #2
    • 11th Mar 17, 10:01 PM
    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
    • By p00hsticks 11th Mar 17, 11:14 PM
    • 5,783 Posts
    • 5,565 Thanks
    p00hsticks
    • #3
    • 11th Mar 17, 11:14 PM
    • #3
    • 11th Mar 17, 11:14 PM
    It changed in 2016, everyone gets the same if you retire after April 2016 provided you have 35 years NI contributions.
    Originally posted by OldMusicGuy
    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
    • By xylophone 11th Mar 17, 11:19 PM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    • #4
    • 11th Mar 17, 11:19 PM
    • #4
    • 11th Mar 17, 11:19 PM
    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
    • By beezkneez 11th Mar 17, 11:23 PM
    • 90 Posts
    • 36 Thanks
    beezkneez
    • #5
    • 11th Mar 17, 11:23 PM
    • #5
    • 11th Mar 17, 11:23 PM
    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!
    Last edited by beezkneez; 11-03-2017 at 11:27 PM.
    • xylophone
    • By xylophone 11th Mar 17, 11:50 PM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    • #6
    • 11th Mar 17, 11:50 PM
    • #6
    • 11th Mar 17, 11:50 PM
    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
    • By OldMusicGuy 12th Mar 17, 8:07 AM
    • 201 Posts
    • 367 Thanks
    OldMusicGuy
    • #7
    • 12th Mar 17, 8:07 AM
    • #7
    • 12th Mar 17, 8:07 AM
    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.
    Originally posted by p00hsticks
    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.
    Last edited by OldMusicGuy; 12-03-2017 at 10:37 AM.
    • beezkneez
    • By beezkneez 13th Mar 17, 12:44 PM
    • 90 Posts
    • 36 Thanks
    beezkneez
    • #8
    • 13th Mar 17, 12:44 PM
    • #8
    • 13th Mar 17, 12:44 PM
    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?
    Originally posted by xylophone
    I can't see COPE on the online quote
    • xylophone
    • By xylophone 13th Mar 17, 1:14 PM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    • #9
    • 13th Mar 17, 1:14 PM
    • #9
    • 13th Mar 17, 1:14 PM
    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
    • By molerat 13th Mar 17, 1:16 PM
    • 17,478 Posts
    • 11,705 Thanks
    molerat
    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.
    www.helpforheroes.org.uk/donations.html
    • Kynthia
    • By Kynthia 13th Mar 17, 8:20 PM
    • 5,042 Posts
    • 7,023 Thanks
    Kynthia
    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.
    Originally posted by molerat
    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!
    • molerat
    • By molerat 13th Mar 17, 9:10 PM
    • 17,478 Posts
    • 11,705 Thanks
    molerat
    Still there on mine
    How contracting out affects your pension income

    Like most people, you were contracted out of part of the State Pension.
    More about ........... link to COPE
    Never has stated when or for how long though.
    www.helpforheroes.org.uk/donations.html
    • beezkneez
    • By beezkneez 14th Mar 17, 12:57 AM
    • 90 Posts
    • 36 Thanks
    beezkneez
    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.
    Originally posted by xylophone

    I thought I had contracted out for a while because I only pay once a month into pension but I have 2 actual pension plans?. I seem
    to remember contracting back in when I started being self employed?

    My partner took out same plan at the same time as me but was self
    Employed then but he only has one pension fund? Where I have 2?!

    Maybe I'm being dim?
    • xylophone
    • By xylophone 14th Mar 17, 1:00 AM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    I have definitely been contracted out fir over ten years.
    You mentioned a DB pension in an earlier post - you have been in this scheme since 2006?

    http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0587



    For service between 6 April 2002 and 5 April 2016, the
    COPE is the amount of S2P given up.
    In this period, low
    and moderate earners were entitled to a higher accrual
    rate than would have been available under SERPS,
    but this was not allowed for in DB rebates and only to
    a limited extent in DC rebates. So many people will have
    built up more than their basic state pension entitlement
    while contracted-out in that period, and that is allowed
    for in the calculation.
    • beezkneez
    • By beezkneez 14th Mar 17, 3:15 PM
    • 90 Posts
    • 36 Thanks
    beezkneez
    I have just checked and I did contract out on 2000 so sure if the online quotation is correct!
    • xylophone
    • By xylophone 14th Mar 17, 4:12 PM
    • 23,647 Posts
    • 13,778 Thanks
    xylophone
    I have just checked and I did contract out on 2000 so sure if the online quotation is correct!

    https://www.gov.uk/contracted-out/new-state-pension


    Your starting amount for the new State Pension may include a deduction if you were contracted out in certain:

    earnings-related pension schemes at work (for example a final salary or career average pension) before 6 April 2016

    workplace, personal or stakeholder pensions before 6 April 2012


    Ring and check?
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