How do I work this out mathematically for myself?

Ladywriter1968

First, this is what I copy and pasted and the answers they came up with to give an idea of what I am talking about:

Example: So, if you have 20 qualifying years and pay an extra 3, your BSP will be boosted from 20/30ths to 23/30th of the full amount. If the full BSP in the tax year you reach your SPA is £97.60 a week (current rate), this is an increase to your entitlement of £9.76 a week, from £65.07 to £74.83.

Just say I have 19 years of paid contributions which then is 19/30 as they explain above. and assume the pension would be £80pw. How do I work out the increase mathematically myself for my own benefit to know what I would get an increase of for example? I have a lot of years to go yet glad to say but I want to know how to work this out for myself as to how they did it above.

I assume that 19/30 they divide by something but if someone can give me the actual formula?

Thanks.

hugheskevi

and assume the pension would be £80pw.

Why would you assume this? The full rate of Basic State Pension is £97.65. You might assume higher amounts if you were projecting into the future, but I don't understand why you would assume a lower rate (unless you are very pessimistic about Tuesday).

How do I work out the increase mathematically myself for my own benefit to know what I would get an increase of for example?

You currently have (19/30)*£80=£50.67.

If you purchase an extra year you will have (20/30)*£80=£53.33.

Which is an increase of £53.33 - £50.67 = £2.66

So the full formula is [[(a+b)/30]*c] - [(a / 30)*c] = Extra weekly pension

where a=current accrued years, b=extra years and c=rate of weekly Basic State Pension

In these calcs it would be normal to use £97.65, not £80, but using your assumptions as stated.

I have a lot of years to go yet glad to say but I want to know how to work this out for myself as to how they did it above.

If you have a lot of years to go don't even think about buying any added years as you will almost certainly qualify for a full pension in any event by the time you reach State Pension age (even if the system isn't significantly changed a few times between now and then, as it inevitably will be).

Ladywriter1968

hugheskevi wrote: »

Why would you assume this? The full rate of Basic State Pension is £97.65. You might assume higher amounts if you were projecting into the future, but I don't understand why you would assume a lower rate (unless you are very pessimistic about Tuesday).



You currently have (19/30)*£80=£50.67.

If you purchase an extra year you will have (20/30)*£80=£53.33.

Which is an increase of £53.33 - £50.67 = £2.66

So the full formula is [[(a+b)/30]*c] - [(a / 30)*c] = Extra weekly pension

where a=current accrued years, b=extra years and c=rate of weekly Basic State Pension

In these calcs it would be normal to use £97.65, not £80, but using your assumptions as stated.



If you have a lot of years to go don't even think about buying any added years as you will almost certainly qualify for a full pension in any event by the time you reach State Pension age (even if the system isn't significantly changed a few times between now and then, as it inevitably will be).

I was just using £80 as a general figure to work it out really, no special reason why.

Ladywriter1968

Ladywriter1968 wrote: »

I was just using £80 as a general figure to work it out really, no special reason why.

ok thanks got it, was not to sure about the algebra though as never been any good with that but understood the first part and came up with same answer as you. Thanks.

Ladywriter1968

hugheskevi wrote: »

Why would you assume this? The full rate of Basic State Pension is £97.65. You might assume higher amounts if you were projecting into the future, but I don't understand why you would assume a lower rate (unless you are very pessimistic about Tuesday).



You currently have (19/30)*£80=£50.67.

If you purchase an extra year you will have (20/30)*£80=£53.33.

Which is an increase of £53.33 - £50.67 = £2.66

So the full formula is [[(a+b)/30]*c] - [(a / 30)*c] = Extra weekly pension

where a=current accrued years, b=extra years and c=rate of weekly Basic State Pension

In these calcs it would be normal to use £97.65, not £80, but using your assumptions as stated.



If you have a lot of years to go don't even think about buying any added years as you will almost certainly qualify for a full pension in any event by the time you reach State Pension age (even if the system isn't significantly changed a few times between now and then, as it inevitably will be).

Thanks for the information, I did ask for formula now on my thing, but I meant how to work it out really which is what you gave me. the algebra part I think I understand, but at least I know now that I have worked so far 19 years so it would be 19/30*pension rate and so on.

Thanks, you must be very clever with algebra.