Pension Forecast - revisited

gterr

Hello there,

In recent threads about the new 'flat-rate' pension scheme I was advised to obtain a pension forecast before anyone could help me to predict what my pension might be.

I've obtained this now.
I am female, born October 1955, and will reach SP age in October 2021. My Statement says I have, so far, 35 qualifying years, worth £107.45 per week, plus Additional SP/Graduated RB of £0.71 per week.

I am currently self-employed but would like to stop soon (ill-health).

Between 1988 and 1997 I worked in two separate university jobs which had final salary pension schemes (USS and JSS). Apart from that almost all my employment has been self-employment.

Does this Satement provide enough info for anyone here to predict my State Pension in 2021, or do I have to go back to USS and JSS and ask whether I was contracted out? Would my pension be higher if I were able to do a couple more years of self-employment?

Many thanks.

Linton

From my understanding of the new scheme:

In 2017 your NI account will be reset to the maximum of

1) £107.45 +0.71 = £108
2) £144 - "Contracted Out Deduction"

As you were only contracted out for 9 years of your working life we can assume the COD is perhaps (144-107) *9/35= £10. So the nett result would be £134. Does your State Pension Forecast state the DOC used in that calculation? The DOC calculations may or may not be the same - it's not clear.

All figures will be increased by inflation between now and then. The calculation assumes that the current proposals are implemented.

From your numbers I believe you were contracted out whilst not self employed, otherwise the ASP would have been much higher. You will not gain anything by extra self employment unless it's after 2017. In that case you will gain £144/35 for each year you are self employed until your pension reached £144.

gterr

Many thanks for your useful reply. There was no info in the Pension Statement other than what I provided in my post.

My employment history is a mess because of illness. It includes a few years on invalidity pension (which pre-dated incapacity benefit), some casual work on very low wages, and a few short periods in pensionable employment, when my pension contributions were presumably returned when I resigned. Certainly, if I add up my 9 years in final salary schemes and my 16 years in self-employment this doesn't come anywhere near the 35 years' NI credits I appear to have. So, it's possible there may be some additional contracted-out years that I have not taken into account.

I guess for me it's probably best to wait and see what I get in 2021!

atush

I don't know much about benefits myself, but i'd go over to the benefits forums. If you retire early due to ill health from your self employment, there may be things for you to claim- or not. Who knows.

Can you do something easier than you do now, part time? Long time between now and 2021

gterr

atush wrote: »

I don't know much about benefits myself, but i'd go over to the benefits forums. If you retire early due to ill health from your self employment, there may be things for you to claim- or not. Who knows.

Can you do something easier than you do now, part time? Long time between now and 2021

Thanks, Atush. Yes, that bit is in hand (though nothing is guaranteed these days with benefits). I think we (husband and I) will be OK once we are both in receipt of SP. We have a few bits and pieces of occupational pensions to add to the SP, also shortly the proceeds of sale of a business property to invest for income. If the worst comes to the worst we could even do equity release on the house, but I don't think we'll need to.

It is, as you've pinpointed, getting between now and 2021 that is the challenge!

wakeupalarm

You would have received 3 years of NI credits from age 16-18 automatically and would have received NI credits when you were unwell. So some of these credits are likely to make up some or all of the 10 additional years not accounted for by Contracted out and Self Employment.

gterr

wakeupalarm wrote: »

You would have received 3 years of NI credits from age 16-18 automatically and would have received NI credits when you were unwell. So some of these credits are likely to make up some or all of the 10 additional years not accounted for by Contracted out and Self Employment.

Thanks. Even if I assume 15 years contracted-out (which is probably an overestimate) then I'll only lose about £16 from being contracted out, so my pension estimate would be £144-16, = £128. Since this is in excess of the £107 I would get on the existing scheme I am happy. For once a pension reform works in my favour! (Not that it's actually confirmed as going ahead yet!)

kidmugsy

gterr wrote: »

I am female, born October 1955 ...
Between 1988 and 1997 I worked in two separate university jobs which had final salary pension schemes (USS and JSS).

Have you checked your pension age for USS? I'd guess it is 60, since your years of service predate recent rule changes.

gterr

Thanks. My pension date with USS would have been higher than 60 (65 I think) but both my USS and JSS deferred pensions were brought into payment early last year on ill-health grounds, without actuarial reduction. They are both small amounts, but extremely helpful.

I must say also that USS were very helpful when I asked for my pension to be paid early. Of course I needed consultants' letters etc., but the process was quick and easy. JSS, on the other hand, contracted out the assessment process to Capita. Got there in the end, but it took a lot more paperwork and considerably more anxiety.