Is this right? Only £123 a week state pension?

ferox666

Colleague turns 65 in June. He has worked full time since 17 (1966) without any gaps paying full nic, and has just received info that his state pension will be around 120 - 123 a week. Is this right? He thought it would be around 150 as an acquaintance gets that. He believed he'd have maximum entitlement. He may now defer but just wondered if this sounds right for someone with max nic contributions born in 1949?

noh

Was he ever in a final salary pension scheme?
Did he ever contract out?

If he didn't contract out and has a full NI contribution record since 1966 then his state pension including additional pension should be around £200 per week.

yangptangkipperbang

He will only get the same as his colleague if he earned the same amount of money in his working lifetime and had the same external pension arrangements (contracted in/out).

The "basic" State Pension is around £113 per week (2014 - 2015 figs)- if you paid any additional contributions:- graduated contributions, 2SP - or whatever else it was called you will receive extra on top of that.

Looking at my latest pension statement, I could have received a "total" State Pension of about £210 a week, but because I was "contracted out" into another Govt scheme I only get £135 - but I also get my separate Govt pension as well.

ferox666

Thanks both. He was member of British rail final salary scheme for many many years (privatised 1997 but retaining benefits accrued to that date) could this be why? He doesn't recall ever opting out of nic/sp. how can he find out if contracted out or get them to confirm that? He thinks he wouldn't - or would it have been automatic due to br pension?

greenglide

ferox666 wrote: »

He was member of British rail final salary

The British Rail final salary scheme and it's successors were contracted out so that would account for the limited amount of Additional Pension (AP).

The loss of a small amount (relatively speaking) of AP (maybe £20 pounds a week or so, depending on income) is a truly small price to pay for the amount of pension the railway scheme must be paying and the fact that the railway scheme will have started paying before SPA was reached - presumable 60 or earlier.

xylophone

Your colleague will have received a statement from the DWP showing his Contracted Out Deduction?