FRSP - Not everyone gets £144

Tancred

gadgetmind wrote: »

As per recent emails, you'll get whichever is largest as a foundation amount. If this is less than £144 (I think you will be just under) then each extra year after 2017 will give you another 1/35th of £144 (just over 4 quid) a week more until you get to £144.

I see. So, as I will have earned 35 years of contributions at age 53, I can still have the opportunity to earn additional full years of NI contributions until age 65? This means that I should be OK to get the full £144.

Thanks for clarifying.

gadgetmind

Yup, the full pension should be pretty easy and if your S2P in 2017 puts you over this, you get to keep the extra but without the same level of index linking.

jamesd

Or put somewhat differently: if you're close to £144 you start to experience the cut to the state pensions for employees that the new system introduces, by blocking additional state pension accrual that today causes most employees to end up with a lot more than just £144.

hugheskevi

DWP have put out a technical note, which covers calculation of the contracted out deduction, available here.

SnowMan

hugheskevi wrote: »

DWP have put out a technical note, which covers calculation of the contracted out deduction, available here.

It seems to be as we thought based on the contracted-out deduction as shown on pensions statements with an adjustment for post 97 contracting-out after which CODs ceased. So the notional post 97 contracted-out deduction used in the rebate derived amount is set to the additional pension that would have accrued post 97 had they contracted-in instead.

And at first glance it's the COD revalued to 2017 effectively or as they describe it is as if someone notionally reached SPA in 2017.

The additional pension is revalued to 2017 in the same way (as if the person had notionally reached SPA at 2017)

Old_Slaphead

My OH, who no longer works, reaches SPA at end 2017.

She's achieved just 30 years NI contribs for which she currently is entitled to the £107. She's always been contracted out.

Post April 2017 will she get state pension of (a) £107 (b) £107 x 30/35 or (c)something else ?

+ of course any indexing between now and SPA start.

Thanks

Linton

Old_Slaphead wrote: »

My OH, who no longer works, reaches SPA at end 2017.

She's achieved just 30 years NI contribs for which she currently is entitled to the £107. She's always been contracted out.

Post April 2017 will she get state pension of (a) £107 (b) £107 x 30/35 or (c)something else ?

+ of course any indexing between now and SPA start.

Thanks

The larger of:

1) £107+ASP/SERPS/S2P (=0?) as given in her State Pension statement.

2) £144*30/35 - contracted out deduction.

I would expect (1) to be the larger, if so she will get what she always thought she would get.

coastline

I've got 33 years NI contributions and 24 years of that time in a final salary pension scheme so I'm guessing I'll be short on both counts.
If the reduction in NI was around 1.6% of the full contribution then every full year contracted out doesn't seem a great amount. I'm guessing at a fraction of £4.11p say around 80p ??
I've used £144/35 years to arrive at £4.11p so in my case maybe 24 x 80p...
I'm totally guessing here and probably wrong....any help would be great..

SnowMan

coastline wrote: »

I've got 33 years NI contributions and 24 years of that time in a final salary pension scheme so I'm guessing I'll be short on both counts.
If the reduction in NI was around 1.6% of the full contribution then every full year contracted out doesn't seem a great amount. I'm guessing at a fraction of £4.11p say around 80p ??
I've used £144/35 years to arrive at £4.11p so in my case maybe 24 x 80p...
I'm totally guessing here and probably wrong....any help would be great..

Have you got a pensions statement with a contracted out deduction amount showing on it? If you have the rebate derived amount is going to be at least that.

Have you now left your occupational scheme? If you have then your GMP at date of leaving increased at the scheme revaluation rate to now should be less than your rebate derived amount.

If you've got 33 qualifying years at 2017 then your foundation amount will be the greater of

a) 33/35 x 144 less rebate derived amount
b) 107 + any additional state pension earned to 2017 (under current system).

Hard to say too much because I'm not sure if 33 qualifying years is what you have now or what you will have at 2017. Are you going to have any more qualifying years pre 2017 and are you going to have any qualifying years post 2017. What year do you reach SPA?

coastline

SnowMan wrote: »

Have you got a pensions statement with a contracted out deduction amount showing on it? If you have the rebate derived amount is going to be at least that.

Have you now left your occupational scheme? If you have then your GMP at date of leaving increased at the scheme revaluation rate to now should be less than your rebate derived amount.

If you've got 33 qualifying years at 2017 then your foundation amount will be the greater of

a) 33/35 x 144 less rebate derived amount
b) 107 + any additional state pension earned to 2017 (under current system).

Hard to say too much because I'm not sure if 33 qualifying years is what you have now or what you will have at 2017. Are you going to have any more qualifying years pre 2017 and are you going to have any qualifying years post 2017. What year do you reach SPA?

I took redundancy and early retirement a few years ago so the only way I can boost my NI is pay for the two years needed.??
I could work again of course but I'd rather just pay a few years NI stamps if its worth it ??
I've had a look at some old pension statements but I can't see any breakdown with figures...just my pension options and value.
Have I got the 80p idea correct in any way or am I making a mistake...thanks for your reply.