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  • FIRST POST
    • The Book-keeper
    • By The Book-keeper 15th Mar 17, 12:52 PM
    • 37Posts
    • 13Thanks
    The Book-keeper
    43 years NI contributions but still not entitled to full State Pension!
    • #1
    • 15th Mar 17, 12:52 PM
    43 years NI contributions but still not entitled to full State Pension! 15th Mar 17 at 12:52 PM
    Hi
    I have 43 years of NI contributions, am 60 years of age & qualify for my state pension in 6 years time. I finished my working life in 2014 and at that time my pension forecast said I qualified for the full state pension. Since then & the new rules which came in in 2016 my state pension is listed as £154.23 per week rather than the full pension of £155.65. I know it's only a difference of £1.42 per week, but if I want to get the full state pension I have to contribute another year's worth of NI Class 3 (£733.20). By my calculation this would take me 10 years before I saw any benefit. I know there's no way round this, but it seems a tad unfair given that I have worked continuously since leaving full-time education & have 43 years of contributions?!!
Page 1
    • atush
    • By atush 15th Mar 17, 1:01 PM
    • 15,743 Posts
    • 9,533 Thanks
    atush
    • #2
    • 15th Mar 17, 1:01 PM
    • #2
    • 15th Mar 17, 1:01 PM
    Were you ever contracted out? A member of a dB scheme?
    • The Book-keeper
    • By The Book-keeper 15th Mar 17, 1:03 PM
    • 37 Posts
    • 13 Thanks
    The Book-keeper
    • #3
    • 15th Mar 17, 1:03 PM
    • #3
    • 15th Mar 17, 1:03 PM
    Contracted out for a short period in the 90's I think
    • OldMusicGuy
    • By OldMusicGuy 15th Mar 17, 1:25 PM
    • 61 Posts
    • 85 Thanks
    OldMusicGuy
    • #4
    • 15th Mar 17, 1:25 PM
    • #4
    • 15th Mar 17, 1:25 PM
    If you were contracted out that affects your entitlement because you paid lower NI while contracted out. The gov.uk website explains this in a bit more detail (I can't post links as I am new here).
    • molerat
    • By molerat 15th Mar 17, 1:44 PM
    • 16,023 Posts
    • 10,189 Thanks
    molerat
    • #5
    • 15th Mar 17, 1:44 PM
    • #5
    • 15th Mar 17, 1:44 PM
    You get the higher of the new or old calculations so no less than you were entitled to under the old scheme at April 2016. Your forecast should show your COPE amount which is deducted from your "new pension" amount which usually brings it down below your old entitlement..
    www.helpforheroes.org.uk/donations.html
    • Lucy Lastic
    • By Lucy Lastic 15th Mar 17, 1:48 PM
    • 707 Posts
    • 985 Thanks
    Lucy Lastic
    • #6
    • 15th Mar 17, 1:48 PM
    • #6
    • 15th Mar 17, 1:48 PM
    I'm in a similar position and could not believe that after 44 years of full NI contributions I still won't get the full new pension when I reach 66 in 4 years time. I was contracted out for 2 years, so have worked for 46 years and the forecast for me is £147.07 in 2020.

    Even though I am still working and contributing NI that is the maximum that I will get.

    The only thing I can do is pay 2 x £689 for the missing 2 years to get the extra £8.58 per week (from what I understand having read pages of notes).

    By 2020 I will have worked for 49 years, so I'm not inclined to pay another £1378!
    • molerat
    • By molerat 15th Mar 17, 1:57 PM
    • 16,023 Posts
    • 10,189 Thanks
    molerat
    • #7
    • 15th Mar 17, 1:57 PM
    • #7
    • 15th Mar 17, 1:57 PM
    You will get no less than you were entitled to under the old scheme. Paying for pre 2016 years will probably not get you any more pension, post up exactly what your pension forecast shows if you would like some thoughts. If purchased, extra years are very good value and pay back the outlay in 3-4 years so if they will make a difference it is well worth it. I will be buying my 3 years needed.
    Last edited by molerat; 15-03-2017 at 2:24 PM.
    www.helpforheroes.org.uk/donations.html
    • OldMusicGuy
    • By OldMusicGuy 15th Mar 17, 2:15 PM
    • 61 Posts
    • 85 Thanks
    OldMusicGuy
    • #8
    • 15th Mar 17, 2:15 PM
    • #8
    • 15th Mar 17, 2:15 PM
    You will get no less than you were entitled to under the old scheme.
    Originally posted by molerat
    Very important point. You should not be not losing out compared to the old system but the government has been "overselling" the new flat rate pension by creating the impression that "everyone" gets the same, which is only true for those that start paying NI after 2016. Until of course a future government changes it again......
    • GibbsRule No3
    • By GibbsRule No3 15th Mar 17, 2:59 PM
    • 616 Posts
    • 358 Thanks
    GibbsRule No3
    • #9
    • 15th Mar 17, 2:59 PM
    • #9
    • 15th Mar 17, 2:59 PM
    Looking for something on my computer I found this letter from the old DTI in 1996 about CSPS did anyone remember when being in receipt of a CS pension meant you were not able to draw the State Pension? I started in 1971. So beside the Contracted out part I guess mine will be reduced with this as well, or did it change as the retirement age did? I am gaining the extra amount per week until I can draw the SP in 2020.


    "October 1996

    Dear XXXX

    PRINCIPAL CIVIL SERVICE PENSION SCHEME

    I am writing to tell you that, have been awarded pension benefits as shown on the attached statement.

    All civil servants who began their service between 1 March 1948 and 31 March 1980 have their Civil Service pension reduced by £1.70 per year for each year of service in this period. This modification stems from the 1948 National Insurance legislation which laid down that civil servants could not draw a state as well as a civil service pension (later legislation allowed this in respect of service after 31 March 1980). It was agreed however to give effect to the legislation by reducing civil service pensions by the whole of the 1948 flat rate national insurance pension of £67.75 per year after a full 40 years' service, with proportional deductions for lesser service (£67.75 divided by 40 = £1.70 per year). Because this abatement will be made you will be able to draw a state pension from the age of 60. As your service began in the relevant period the statement attached shows the abatement which will apply when you reach the state retirement age of 60. No abatement will be made before that date.

    I should further explain that to modify your pension correctly Paymaster will deduct the abatement amount from your original award and add pension increases to the balance. This means that the modification at age 60 will be more than shown here. As the pension increases are percentages related to the retail price index the exact future amount cannot be known at this stage."

    Complicated "innit"?
    Paddle No 21
    • atush
    • By atush 15th Mar 17, 3:06 PM
    • 15,743 Posts
    • 9,533 Thanks
    atush
    I'm in a similar position and could not believe that after 44 years of full NI contributions I still won't get the full new pension when I reach 66 in 4 years time. I was contracted out for 2 years, so have worked for 46 years and the forecast for me is £147.07 in 2020.

    Even though I am still working and contributing NI that is the maximum that I will get.

    The only thing I can do is pay 2 x £689 for the missing 2 years to get the extra £8.58 per week (from what I understand having read pages of notes).

    By 2020 I will have worked for 49 years, so I'm not inclined to pay another £1378!
    Originally posted by Lucy Lastic
    It is my understanding, if you are still working you can still raise that 147 figure.
    • molerat
    • By molerat 15th Mar 17, 3:59 PM
    • 16,023 Posts
    • 10,189 Thanks
    molerat
    It is my understanding, if you are still working you can still raise that 147 figure.
    Originally posted by atush
    OP states that the £147 is the max achievable amount not the starting amount.
    www.helpforheroes.org.uk/donations.html
    • Aretnap
    • By Aretnap 15th Mar 17, 4:20 PM
    • 2,587 Posts
    • 2,049 Thanks
    Aretnap
    The only thing I can do is pay 2 x £689 for the missing 2 years to get the extra £8.58 per week (from what I understand having read pages of notes).
    Originally posted by Lucy Lastic
    I'm not sure whether or not your understanding is correct - someone else will hopefully comment on that.

    But on the assumption that it is... £8.58 per week is £446 per year. So it will take you just over three years to recoup your £1378. So provided you're planning to live for at least three years after your state retirement age, it's a very generous offer indeed.

    By 2020 I will have worked for 49 years, so I'm not inclined to pay another £1378!
    Speaking as a taxpayer: Please do keep your £1378 and forgo the extra pension!

    But speaking as someone trying to be helpful: That would be a pretty spectacular way of cutting off your nose to spite your face.
    • molerat
    • By molerat 15th Mar 17, 4:27 PM
    • 16,023 Posts
    • 10,189 Thanks
    molerat
    I'm not sure whether or not your understanding is correct - someone else will hopefully comment on that.

    But on the assumption that it is... £8.58 per week is £446 per year. So it will take you just over three years to recoup your £1378. So provided you're planning to live for at least three years after your state retirement age, it's a very generous offer indeed.

    Speaking as a taxpayer: Please do keep your £1378 and forgo the extra pension!

    But speaking as someone trying to be helpful: That would be a pretty spectacular way of cutting off your nose to spite your face.
    Originally posted by Aretnap
    From op's post it would appear that they will be working until SRA and the extra 2 years are pre 2016 which, looking at their other comments, means paying this would not add to the pension.
    www.helpforheroes.org.uk/donations.html
    • xylophone
    • By xylophone 15th Mar 17, 4:35 PM
    • 20,974 Posts
    • 12,025 Thanks
    xylophone
    Looking for something on my computer I found this letter from the old DTI in 1996 about CSPS
    http://www.civilservicepensionscheme.org.uk/media/181379/tar_apr-16.pdf

    National Insurance Modification

    The Civil Service pension scheme
    provides for pensions to be reduced
    from State Pension age to take
    account of the basic State Pension.
    If your reckonable service includes a
    period of time before 1 April 1980, the
    pensions payroll provider will reduce
    your Civil Service pension once you
    start to claim your State Pension. This
    reduction is known as National Insurance
    Modification. This reduced pension
    is then increased in line with rises in
    the cost of living from your last day
    of service. The reductions made for
    National Insurance Modification are
    less than £2 a year for each year of your
    service up to 1980.
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