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    • DailyDaz
    • By DailyDaz 11th Mar 18, 1:01 PM
    • 7Posts
    • 1Thanks
    Pension Forecast Confusion
    • #1
    • 11th Mar 18, 1:01 PM
    Pension Forecast Confusion 11th Mar 18 at 1:01 PM
    I have just checked my Wife's pension forecast on the government gateway website as she was keen to find out what she will get in 2024 when she hits retirement age of 66. It says she will receive £146.46 unless she contributes for another 3 years before 5 April 2024 to receive the full £159.55 per week. She has a total of 43 years of contributions of which 6 years had none or not enough contributions due to being unemployed or contracted out. She still has 37 years of full contributions as it says on her statement. My question is why does she have to contribute another 3 years to get her full pension? I thought you needed only 35 years. She no longer works or claims any benefits due to my income.
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    • kidmugsy
    • By kidmugsy 13th Mar 18, 8:56 PM
    • 10,241 Posts
    • 6,944 Thanks
    HMRC want £733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.
    Originally posted by DailyDaz
    Why? Get her to contribute £2880 (net) to a pension - say a SIPP at Hargreaves Lansdown - and in due course, once HMRC has paid the provider the £720 tax rebate, withdraw the £3600. Profit = £720, thus defraying her costs.

    If I were you I'd bung £2,880 into HL before this tax year ends, and draw nothing out, because it'll take some weeks for the HMRC cash to arrive. And then another £2,880 after April 6th. To keep charges down be sure to leave behind £1,000 when she firsts draws down income. Check the provider's list of charges to make sure that my knowledge about them is not out of date.
    Free the dunston one next time too.
    • Silvertabby
    • By Silvertabby 13th Mar 18, 9:29 PM
    • 2,380 Posts
    • 3,230 Thanks
    Hmm, you are misremembering slightly... if a refund went unclaimed, then I would expect the case to get processed as a frozen refund (status 9 if you were an AXISe'r - other systems use different terminology), at which point a CEP would have been paid. On the member rejoining, the administrator would then reclaim the CEP from HMRC as part of the auto-aggregation process.

    Put another way, if an LGPS administrator is currently doing a GMP reconciliation and a frozen refund case appears in the data from HMRC, then someone down the line has made an error, as HMRC should not be showing the period as contracted-out.

    DailyDaz - my first thought on reading your 'two years' line was that HMRC have no record of a CEP having been paid, even when it should have been. On the other hand, I agree with Silvertabby that £18 p/w is a non-trivial amount for two years, in fact it seems high to me even if it relates to a pre-88 period when schemes could (and usually did) wait 5 years before granting early leavers a preserved benefit. Your wife definitely needs to track this down.
    Originally posted by hyubh
    Partly - apologies. I should have said that we tended to use to use Status 2 (neither frozen nor deferred) as an interim measure until we knew what the member was going to do - refund, transfer to another pension fund or move to another job in the LGPS. The latter was a particular problem for us, as many people changed jobs/posts in our Authority but the 'new starter' details would lag well behing the 'leaver' details. This was even more of a problem during the two periods when the vesting period changed from 3 months to 2 years, and then back to 3 months. If the member didn't respond to the letter offering them the choice of either a refund or a deferred pension, then we would apply the default of deferred pension benefits as that was financially better for them. If we had taken each record straight to Status 9 then the CEPs could have been back and forwards like yo-yos.
    Last edited by Silvertabby; 13-03-2018 at 9:37 PM.
    • missile
    • By missile 13th Mar 18, 9:38 PM
    • 9,306 Posts
    • 4,610 Thanks
    You may find like me she gets more than the pension forecast :-)
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
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