Understanding State Pension Forecast Help

tony4147

Just received my state pension forecast.
The forecast is made up to April '12.

It looks like I will get a pension of £122.38 in total, made up of £107.45 state pension and £14.93 Serps+GRB (never heard of GRB).

I'm 49 y/o and have 31 years of contributions, I'm probably going to be working another 15/16 years.

Couple of questions
1. Will my total state pension increase with the further NI contributions made over those 15/16 years?

2. Will my state pension increase to the £144/Wk?

3. I was contracted out for 22 years, and have the contracted out element in a private pension with a plan value of £33K, how will this figure in the £144/Wk?

4. At 55 y/o I think I can take a lump sum of 25% from the private pension that has the contracted out contributions (correct me if I'm wrong), if I did that will that have an impact on the £144?

Jack_Griffin

You will get the higher of that forecast or the new rate, so the new rate of £144 (uprated each year), will be better for you. It will not be effected by what you have in or do with the other fund.

At the moment you need another 4 years in work to get the full £144 rate, 31 years gives you £127.54 (or 31/35ths), if you worked this year then that is another year sorted ;-)

Your pension plan value for being contracted out all those years seems very small and you would get something like £70/month at age 65 if you took the 25% and wanted the pension it paid you to increase inline with inflation.

Run your details through this calculator to see what you might expect http://pluto.moneyadviceservice.org.uk/annuities

Is the £33K plan the only part of your employers scheme to which you are entitled or is there another element?

tony4147

My understanding is that the £33k is what all my contracted in contributions was paid into, in the majority of years i was contracted out I worked through a Limited Company and kept mt NI down as low as possible, hence the £33K, I also have a couple of other pension plans.

Linton

The £144 will be reduced by an amount depending on when and for how long you were contracted out. But the amount of reduction cannot bring it below what you have currently accrued - £122.38. Any full years NI beyond the 35 limit will then add £144/35 to your pension until it reaches a total of £144, so from the figures you have given you should eventually reach the £144 standard pension. And of course you get the income from your contracted-out pension.

tony4147

Linton wrote: »

The £144 will be reduced by an amount depending on when and for how long you were contracted out. But the amount of reduction cannot bring it below what you have currently accrued - £122.38. Any full years NI beyond the 35 limit will then add £144/35 to your pension until it reaches a total of £144, so from the figures you have given you should eventually reach the £144 standard pension. And of course you get the income from your contracted-out pension.

Just to be clear, from what your saying I if I work the next 15/16 years I should get the full £144 or whatever it is then AND keep all of my contracted out pension?

p00hsticks

tony4147 wrote: »

Just to be clear, from what your saying I if I work the next 15/16 years I should get the full £144 or whatever it is then AND keep all of my contracted out pension?

Yes. any private pension you may have paid into is in addition to any state pension you have earned

atush

Tony, is that contracted out bit, your only private pension? If so, you need to sort some pension contribs.

Does your company have one? If they don't, they will do soon so do join it.

If you have no pension but the contracted out one, do you fill your Cash and S&S isas?

Jack_Griffin

atush wrote: »

Tony, is that contracted out bit, your only private pension? If so, you need to sort some pension contribs.

Does your company have one? If they don't, they will do soon so do join it.

If you have no pension but the contracted out one, do you fill your Cash and S&S isas?

tony4147 wrote: »

My understanding is that the £33k is what all my contracted in contributions was paid into, in the majority of years i was contracted out I worked through a Limited Company and kept mt NI down as low as possible, hence the £33K, I also have a couple of other pension plans.

He already said he has a couple of other schemes.

tony4147

atush wrote: »

Tony, is that contracted out bit, your only private pension? If so, you need to sort some pension contribs.

Does your company have one? If they don't, they will do soon so do join it.

If you have no pension but the contracted out one, do you fill your Cash and S&S isas?

No, I have two other pension plans, total plan value of £110K, and I contribute £600/month into one of them. If I work another 15/16 years I should be ok..............................I hope