Is £144 pw the maximum State Pension

mania112

hardwicky wrote: »

Does this mean there is time between now and 2016 to make payments into SP2 even if I have not until now, and this could increase my state pension above the future flat £144.

I believe so, but don't hold me to it.

I'm not sure exactly how much of an impact you will make over the next 3 years, however.

Due to the lack of clarity on this could you potentially contribute to a personal pension instead, if you wish to increase your retirement income?

hardwicky

Thank you for the information.

floppity

(Apologies if this has already been answered elsewhere:o)

I have more than 35 years' worth of NI contributions (I got a statement a couple of months ago when this pension change was first announced).

I have been contracted out for about 25 years of this time.

So, my understanding is that this will mean I will get some sort of deduction from the flat-rate state pension of c£144. Is there any way I can work out who much this deduction is likely to be?

Many thanks

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181229/single-tier-pension.pdf
page 47 onwards - no details yet of the precise amounts.

gadgetmind

floppity wrote: »

So, my understanding is that this will mean I will get some sort of deduction from the flat-rate state pension of c£144. Is there any way I can work out who much this deduction is likely to be?

Not yet. However, if your entitlement under current system is greater than "£144 minus mystery deduction", then you keep the current sum plus you get your contracted out pension on top of this.

taktikback

It's the "mystery deduction" that's concerning me. It wouldn't be fair to make it the same as the COD because that would normally be applied at retirement, after the years of contracted in contributions had been accumulated. Trouble is - if it was as crude as the COD then it could wipe out many additional years contracted in contributions when applied early in 2016 because the foundation sum would "bust back" from £144 rather than what would have been the case if another 10 years contributions counted - say to 2026. As it stands - the full NI we will have to pay from 2016 would have no benefit other than to potentially bring the total back up to £144

taktikback

Think I've finally figured it out from the technical notes published. The COD for being contracted out is applied in full BUT not before they have added an equivalent amount that would have been earned if contracting out hadn't occurred (up to 1997). So the two cancel out - leaving the basic pension amount of £107 to which any other non contracted out years are added -which for me would get me back to about £135 under the old rules. They would be used because they are better than the new rules which also apply a rebate derived amount but with a start point of £144

So a couple of years after 2016 (@£4.11 per year) I'll be back to £144 and that 's my lot

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