State pension estimates for 2016 +

greenglide

The online service and the "batch" system used by DWP clerks have always been separate but both rely on data from the HMRC contribution records.

The forecasts for the nSP are allegedly manually calculated until the new IT is in place at some future date.

Lots of IT development required, DWP are reluctant to commission any.

brewerdave

Ran the online forecast for myself last night - with a SPA date of June 2015. Worked fine -showed me a forecast of £32+ for additional SP including £1.19 for GRB. However, It still includes the statement "the amount of your additional state pension could be lower...if you were contracted out anytime between 6 April 1978 and 5 April 1997."
So does the forecast include the expected deduction for contracting out or not?? Post #17 suggests that for retirement dates after April 2016 it is attempting an estimation of the deduction but not for dates prior?

molerat

The deduction statement is still there for post 2016 retirement dates. The latest version of the explanation leaflet mentions the same on p15 so the information posted previously does not seem to be true. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/314027/dwp040b-jun-14.pdf
Pre 2012 statements did not mention any deduction, that only came in after the 2012 computer update and my statement showed no difference in the figures. Pre 2012 statements also separated ASP/S2P and GRB but post lumped them together. My 2012 statement showed full basic + £12.93 ASP and £3.25 GRB, my 2014 just shows +£16.82 [STRIKE]so hopefully I can only lose a max of around £13.44[/STRIKE].

Just phoned for my statement and told it will take 4 - 6 weeks

SeekTruth

brewerdave wrote: »

Ran the online forecast for myself last night - with a SPA date of June 2015. Worked fine -showed me a forecast of £32+ for additional SP including £1.19 for GRB. However, It still includes the statement "the amount of your additional state pension could be lower...if you were contracted out anytime between 6 April 1978 and 5 April 1997."
So does the forecast include the expected deduction for contracting out or not?? Post #17 suggests that for retirement dates after April 2016 it is attempting an estimation of the deduction but not for dates prior?

The forecast amount is the net amount left after taking off the Contracted Out Deduction (COD).

The statement saying "the amount of your additional state pension could be lower...if you were contracted out anytime between 6 April 1978 and 5 April 1997" is to cater for those whose COD is increasing at a faster rate than their gross Additional Pension [this is likely to be true for those with a deferred GMP increasing at a fixed percentage rate]. For the sake of illustration, if gross AP increases by 2% and COD increases by 5% then net AP will increase by less than 2%, and could even decrease!

SeekTruth

molerat wrote: »

... My 2012 statement showed full basic + £12.93 ASP and £3.25 GRB, my 2014 just shows +£16.82 so hopefully I can only lose a max of around £13.44.
...

You won't 'lose' anything. Your Foundation Amount will be the greater of

1. What you would have received under the current rules, current estimate full Basic + £16.82
2. A calculation based on new rules that, if you have substantial Contracted Out service, is likely to be less than the current rules amount

So, if you have substantial Contracted Out service, the current estimate of your Foundation Amount will be £113.10 + £16.82 = £129.92. If you then have any years of NI contribution paid or credited after April 2016 then your pension will increase from the £129.92 figure by approximately £4.20 for each such year (up to a maximum of the new pension rate, £148ish, - if you have enough years!).

molerat

That is where the confusion lies, the statement says I may receive less as I was contracted out 78-97. I will not be making further contributions, I retired in 2009 at 55 and do not intend to work in future. Will have to wait the 4-6 weeks to get a statement.

Is my starting amount affected because I have been in a pension at work, or paid into a private pension?

If you are or were in an earnings-related pension scheme or, before 6 April 2012 you were in any pension scheme at work, you are likely to have “contracted out” of the additional State Pension. Some stakeholder and personal pension schemes were also contracted out.
If you have been contracted out of the additional State Pension at any time before April 2016, we will make a deduction when working out your starting amount. The deduction will be made when working out both your new and existing scheme amounts.
This is because, depending on the type of scheme:
• you would have paid NI contributions at a lower rate, or
• some of the NI contributions you paid were used to contribute to your stakeholder or personal pension instead of your additional State Pension.

Example – the amount under the existing scheme rules is higher
On 6 April 2016, Yvonne has 30 qualifying years on her NI contribution record. During her working life, Yvonne has periods when she was contracted out of additional State Pension.
Using the new State Pension scheme rules, Yvonne would get £95.20 a week (£127.20 (£148.40 x 30/35ths) less a deduction of £32).
Using the existing scheme rules, Yvonne would get £137.10 a week (£113.10 basic State Pension and £56 additional State Pension less a deduction of £32).
Yvonne’s starting amount will be the higher of these two amounts, which is £137.10 a week.

The amount of your additional State Pension we use to work out your starting amount after April 2016 may be different to the amount in your State Pension statement we have given you now. In some circumstances it could be lower, especially if you were contracted out at any time between 1978 and 1997, and you have already left the scheme or leave it before the new State Pension starts.

Clear as mud then.

SeekTruth

molerat wrote: »

... I will not be making further contributions, I retired in 2009 at 55 and do not intend to work in future. ...

Will Autocredits apply, see http://www.hmrc.gov.uk/manuals/nimmanual/nim41245.htm?

molerat wrote: »

...

Clear as mud then.

Does https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/204604/single-tier-pension-transition-technical-note.pdf help? [NB it was written before the change in transition date from April 2017 to April 2016.]

greenglide

Will Autocredits apply, see http://www.hmrc.gov.uk/manuals/nimmanual/nim41245.htm?

But autocredits would only increase the number of qualifying years? So anyone with 30 years in the existing system would gain nothing if their old rules amount was greater than the new rules amount. If they already have 35 years it wouldnt impact either figure.

Remember that autocredits dont increase AP.

molerat

SeekTruth wrote: »

Will Autocredits apply, see http://www.hmrc.gov.uk/manuals/nimmanual/nim41245.htm?

No, still below the women's state retirement age.

SeekTruth wrote: »

Does https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/204604/single-tier-pension-transition-technical-note.pdf help? [NB it was written before the change in transition date from April 2017 to April 2016.]

Not really as it still does not clarify whether the current quoted pension is what I would actually get or if there is a further deduction to be made. It will have to wait for another 4-6 weeks for the answer.

SeekTruth

greenglide wrote: »

But autocredits would only increase the number of qualifying years? So anyone with 30 years in the existing system would gain nothing if their old rules amount was greater than the new rules amount. If they already have 35 years it wouldnt impact either figure.

Remember that autocredits dont increase AP.

If the Foundation Amount is below the new rules amount then autocredits after April 2016 (assuming they will still exist) will increase the pension.