qualifying years for state pension.

fred_karno

The new announcement sent me to look at my last pension forecast, which I admit I had not read in detail. I got it in 2009. It appears by now I will have 42 qualifying years, so well over 35 needed. However, around 15 of these years were contracted out whilst in a private pension scheme from an employer. So, I will lose out on some years due to "rebate derived amount deduction". Question is how many? Is it 15 years as that is number of contracted out years, or is it 8 (42 years in total less 15 contracted out leaves 27 contracted in- so 35 less 27leaves 8 as contracted out?

Looking at old forecast, the legalise is almost impenetrable. Does anyone understand this:-
You have an additional state pension estimated at £28 per week. This is made up as follows
Total additional state pension £50
Less contracted out deduction £22
Total estimated additional state pension £28.
At some time you chose to "contract out" of the additional state pension by spying into an Occupational pension. Because of this we make a contracted out deduction ( COD) from the maximum additional state pension we would otherwise pay you.
I thought for years contracted out you earned NO additional state pension? Does this mean they have included all years in arriving at the £50 and then show how much is from contracted out years (£22) leaving true ASP of £28. Or do they actually penalise me for the contracting out by reducing amount I get for years not contracted out? And when thy go on to say " We make changes every year to the additional state pension........your ASP could be different and could actually be reduced to nil" how likely is that?

bilbo51

grey_gym_sock wrote: »

riches beyond your wildest dreams

No begging letters please...

daz378

please help , how many qualifying years towards my pension(national insurance stamp wise..... thus follows my cv ......left school YTS plumbing 1 year .....3 years warehouse work 2 years college business btec 1 year
AAT college 2 and half years university (did not finish....still get stamp?) after uni pub management 2 years to 94 then 2 year gap to care service worker from 96 until today....maybe 6months gap when leaving school and 2 years after bar work
quite a meandering work work record so im now 46 nearly47.... so do i already have 28/29 years of stamps ? also worked summer vacation in bremen 6 weeks at mercedez benz .... student bar work from 87-89 .... so i have to work another 5 /6 years to get a pension....thank you mr osborne

Jack_Griffin

daz378 wrote: »

please help , how many qualifying years towards my pension(national insurance stamp wise..... thus follows my cv ......left school YTS plumbing 1 year .....3 years warehouse work 2 years college business btec 1 year
AAT college 2 and half years university (did not finish....still get stamp?) after uni pub management 2 years to 94 then 2 year gap to care service worker from 96 until today....maybe 6months gap when leaving school and 2 years after bar work
quite a meandering work work record so im now 46 nearly47.... so do i already have 28/29 years of stamps ? also worked summer vacation in bremen 6 weeks at mercedez benz .... student bar work from 87-89 .... so i have to work another 5 /6 years to get a pension....thank you mr osborne

Get an HMRC pension statement, it tells you on that.

Mojisola

daz378 wrote: »

please help , how many qualifying years towards my pension(national insurance stamp wise..... thus follows my cv ......left school YTS plumbing 1 year .....3 years warehouse work 2 years college business btec 1 year
AAT college 2 and half years university (did not finish....still get stamp?) after uni pub management 2 years to 94 then 2 year gap to care service worker from 96 until today....maybe 6months gap when leaving school and 2 years after bar work
quite a meandering work work record so im now 46 nearly47.... so do i already have 28/29 years of stamps ? also worked summer vacation in bremen 6 weeks at mercedez benz .... student bar work from 87-89 .... so i have to work another 5 /6 years to get a pension....thank you mr osborne

Using present figures you won't get a pension until 2032 so you've plenty of time to make up the last few years you need.

daz378

ive also got 12 years LGPS as well

SnowMan

fred_karno wrote: »

The new announcement sent me to look at my last pension forecast, which I admit I had not read in detail. I got it in 2009. It appears by now I will have 42 qualifying years, so well over 35 needed. However, around 15 of these years were contracted out whilst in a private pension scheme from an employer. So, I will lose out on some years due to "rebate derived amount deduction". Question is how many? Is it 15 years as that is number of contracted out years, or is it 8 (42 years in total less 15 contracted out leaves 27 contracted in- so 35 less 27leaves 8 as contracted out?

Looking at old forecast, the legalise is almost impenetrable. Does anyone understand this:-
You have an additional state pension estimated at £28 per week. This is made up as follows
Total additional state pension £50
Less contracted out deduction £22
Total estimated additional state pension £28.
At some time you chose to "contract out" of the additional state pension by spying into an Occupational pension. Because of this we make a contracted out deduction ( COD) from the maximum additional state pension we would otherwise pay you.
I thought for years contracted out you earned NO additional state pension? Does this mean they have included all years in arriving at the £50 and then show how much is from contracted out years (£22) leaving true ASP of £28. Or do they actually penalise me for the contracting out by reducing amount I get for years not contracted out? And when thy go on to say " We make changes every year to the additional state pension........your ASP could be different and could actually be reduced to nil" how likely is that?

First of all it depends on whether you reach SPA before or after the scheme is introduced (which at the earliest is April 2017).

Assuming your SPA is after the date of implementation then you will get a guarantee called the foundation amount which will be the greater of a) an amount calculated on the new state scheme basis adjusted for contracting-out and b) accued rights on the old scheme basis.

So your guarantee is the maximum of

a) £144 less rebate derived amount
b) £135 (=£107 (current basic state pension) +28)

The rebate derived amount is likely to be more than £9 in your case (albeit we don't know how it will be calculated).

So the greater of these two is part b) which is £135pw (plus any additional state second you accrue between the statement date and 2017).

So in simple terms you will get £135pw (plus any additional state second you accrue between the statement date and 2017).

After the implementation date you will only be able to further increase this amount to £144 through post implementation qualifying years, although if you have accrued more than £144 by the date of implementation you will keep the extra but won't be able to accrue any further state pension.

Roughly speaking and assuming the proposal is implemented as planned. Pension statements are notoriously innacurate in relation to additional state pension so yes the amounts could change but by how much I couldn't tell you.

Does this mean they have included all years in arriving at the £50 and then show how much is from contracted out years (£22) leaving true ASP of £28

That's pretty much it leaving out the complications

fred_karno

Belated Thanks Snowman,
A couple of points.
The GMP earned during contracted out periods is compared with notional ASP that would have been earned if I had been contracted in for those years, I think. If the notional ASP is higher, I get the net amount as ASP and if it is lower, I get nothing (as I have got it within my company pension scheme as GMP). Is this period completely ring fenced from subsequent periods of contracted in employment during which ASP is earned - in other words if the contracted out period produces a negative when GMP is deducted from GMP (likely in my case as GMP is revalued at 6.25% P.A.), do they use this negative figure and take away some of the ASP earned during the contracted in period? Or will i keep all ASP earned during contracted in periods?
Secondly my last pension statement was in October 2009. Will this include 2008/2009 ASP, or does it take longer for it to work through the system and get added in to pension statements?

SnowMan

fred_karno wrote: »

in other words if the contracted out period produces a negative when GMP is deducted from GMP (likely in my case as GMP is revalued at 6.25% P.A.), do they use this negative figure and take away some of the ASP earned during the contracted in period? Or will i keep all ASP earned during contracted in periods?
Secondly my last pension statement was in October 2009.

If the contracted-out period produces a negative then it can be offset against additional state pension from contracted-in periods.

That might not quite always happen though. The rules are not clearly stated and I can only give a very vague guess on this, hopefully someone who knows it better will correct me. But this is possibly where that offset might not be done:

Any post 6/4/97 ASP can't be reduced because of pre 6/4/97 negative ASP (I very vaguely recall that).

There might be some rule that any negative pre 6/4/2002 ASP (i.e. SERPS) can't be offset against any positive post 6/4/2002 ASP (i.e. S2P) and vice versa but that is a guess.

Anybody else know?

Will this include 2008/2009 ASP, or does it take longer for it to work through the system and get added in to pension statements?

I don't have any knowledge of how they produce the statements. They did used to put a comment on statements to say please wait until 6 months into the next tax year before assuming that the previous tax year's NI had been included in the statement.

Jack_Griffin

I'm pretty sure pension statements can't include the benefits accrued in the tax year in which they are generated.