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Pension higher for Dad but he worked less

I understand very little about pensions and my parents have just asked me something Im hoping someone here can explain to ne.

My father isnt British born but moved to this country in 1972. He worked full time until he retired at 65 (2 yrs ago). During that time he paid both tax and NI.

My mum is British born and started working at 15. She continued to do so until she was 65. Except for one months maternity leave and a year unemployed she has worked throughout. She paid full NI and not a married womens stamp (whatever one of those is). She also paid the NI she missed when unemployed using her redundancy pay.

In short my Mum has made more NI payments than my dad, but receives £200 less pension than he does.

Can anyone explain why that might be the case? I assumed everyone got more if you had paid more stamps or does it go on how much you were earning when you made those contributions?

Comments

  • I think you may have incorrect figures, maybe your mum didn't work as long as she thinks, it should all be on the paperwork - check that and get back to us all.

    fj
  • jem16
    jem16 Posts: 19,495 Forumite
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    lisa701 wrote: »
    Can anyone explain why that might be the case? I assumed everyone got more if you had paid more stamps or does it go on how much you were earning when you made those contributions?

    As far as the basic state pension is concerned, then yes if you paid a certain amount of NI contributions you got the full basic state pension.

    However SERPS/S2P is also earnings related so the more you earned, the more SERPS/S2P you got. Some people were contracted out of SERPS/S2P and got no additional pension.

    https://www.gov.uk/additional-state-pension

    This will probably be why your Dad has more than your Mum.
  • Mojisola
    Mojisola Posts: 35,571 Forumite
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    If your Dad was earning more than your Mum, he could be getting more in his pension.

    Someone retiring at the moment only needs 30 years of contributions to get the basic state pension. You don't get more because of extra years of contributions.
  • Thanks everyone. Checked all the info with my parents and its all correct. However, Mum said she recalls opting oylut of SERPS for a period when she worked for a company who offered a company pension. She cant remember why but they recommended staff did so.

    Thats probably why she is getting less than my Dad does.
  • jem16
    jem16 Posts: 19,495 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    lisa701 wrote: »
    However, Mum said she recalls opting oylut of SERPS for a period when she worked for a company who offered a company pension. She cant remember why but they recommended staff did so.

    Many company pensions, particularly final salary pensions, were contracted out of SERPS/S2P - not opted out as that is a different term and has a different meaning.

    This was usually because the company pension offered benefits that were at least equal, if not higher, than what you got by staying contracted in.
  • lisa701 wrote: »
    ...she worked for a company who offered a company pension...
    So is she now in receipt of this company pension? Make sure she is getting it as it is easy to lose track if you change jobs.
    Are you for real? - Glass Half Empty??
    :coffee:
  • xylophone
    xylophone Posts: 45,428 Forumite
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    she recalls opting oylut of SERPS for a period when she worked for a company who offered a company pension. She cant remember why but they recommended staff did so.

    Which company? When? For how long? Was she entitled to a deferred pension? http://www.pensionsadvisoryservice.org.uk/finding-a-lost-pension
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