Question about a GMP and the State Pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 796 views
Tempus_Fugit_2Tempus_Fugit_2 Forumite
13 Posts
Hi Folks,

I am not sure about an aspect of the pensions that I will be able to claim in the future and I would appreciate a little guidance. In the early 1980s I paid into a company pension scheme and I understand that I was contracted out of SERPS. When I left that employment the pension became deferred.

I joined the LGPS in 1990 and I am due to retire in 2019.

I am assuming that I will have paid NI contributions for at least 30 years by the time that I retire ( I intend to check that)

A few months ago I contacted the administrators of my deferred pension and they advised me that my pension would be worth £4,200.00 per year when I reach the age of 65. There were references in the letter to this being the amount required for a Guaranteed Minimum Pension.

My question is : When I retire will I be able to get the full entitlement from the State Pension + the Deferred Pension + the LGPS benefits ?

Thanks.
Information will not make me any wiser, merely better informed :)

Replies

  • JOHNGTJOHNGT Forumite
    108 Posts
    Yes.

    When a defined benefit scheme contracts out, it must provide a pension roughly equivalent to the State Second Pension (previously SERPS). Up until 1997, the scheme had to provide a guaranteed minimum pension (GMP) which was equal to SERPS. Since 1997, the contracted out test is broadly a 1/80th pension benefit for each year.

    The LGPS is also contracted out so you have been contracted out for most of your working life.

    You may have been contracted into SERPS in the mid-late 80s if you were not in a contracted out scheme and earned enough to reach the lower earnings limit.

    So, you will get full BASIC state pension (as you have 30 years) + LGPS + company pension from early 80s + (maybe) a small amount of SERPS.

    Get a state pension forecast from the DWP: http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008
  • JOHNGT > Thanks for the comprehensive reply. I was unsure if there was going to be some sort of linkage between the GMP and the calculation of the State Pension. You have cleared it up nicely.

    I will be following the link to request a state pension forecast.

    Thanks again :beer:
    Information will not make me any wiser, merely better informed :)
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