State pension estimates for 2016 +

diablo676

noh wrote: »

If you were born before 6th October 1953 you will get 3 years additional autocredits for the tax years when you are 62 to 64. See link in post #36

Ta, I'd missed that.

System

I am a teacher and will retire at 60 after 37 services service in 2018. As I have been contracted out all my working life as a member of the Teachers Pension Scheme I assume this will affect my State Pension which I am due to begin receiving in July 2024.
I am further assuming I will receive the basic pension which is not a problem.
I am just curious what that basic amount will be. I did send for a pension statement a few months ago. When that was provided it said I would get the basic amount which at the moment is about £113. I suppose I am asking if I will receive the estimated £144 or less.
I am just curious, not particularly concerned. I believe I also received some credits for my time at university and when I worked part time in various jobs at weekend and during school/university holidays between the ages of 16 and 23.


Many thanks in advance.


E.

jem16

excelpaul wrote: »

When that was provided it said I would get the basic amount which at the moment is about £113. I suppose I am asking if I will receive the estimated £144 or less.

You will not receive the estimated £144 as your contracted out deduction is likely to pull it down way below this.

You will probably find that your entitlement under current rules will be higher than the new rules so really you should expect it to be around £113 plus inflation.

System

Thanks Jem16
That seems quite fair as I have been contracted out all those years.


Response much appreciated.


E.

okydoky

Hi, born in 1956, my SP is due in 2022
Latest forecast shows 41 qualifying years so basic of £113.10 plus ASP + GRB of £73.53.
(In fact I took voluntary redundancy late 2012 and have since "retired".)
My Pension Forecast has the caveat about being contracted out between 1978 and 1997 - in fact I was Contracted Out between 1993 and 2005, so my question is :-
Will my ASP be reduced pro rata for the 12 years I was Contracted Out, or will it only be reduced for the 4 years between 1993 and 1997?
Anybody know the answer to this one?
Many thanks

jamesd

excelpaul wrote: »

I am a teacher and will retire at 60 after 37 services service in 2018. As I have been contracted out all my working life as a member of the Teachers Pension Scheme I assume this will affect my State Pension which I am due to begin receiving in July 2024.

You will have accumulated no Additional State Pension from SERPS and now S2P because your pension scheme was contracted out of that and it received the money instead of your state pension. That was used to increase the benefits of the TPS instead.

excelpaul wrote: »

I am just curious what that basic amount will be. I did send for a pension statement a few months ago. When that was provided it said I would get the basic amount which at the moment is about £113. I suppose I am asking if I will receive the estimated £144 or less.

You will receive less than the full flat rate. What you will get as a foundation amount is the flat rate, which is expected to be around £155 when it starts after inflation increases, less a contracted out deduction for the years when you were contracted out. Since it is likely that you have been contracted out for all of your working years that deduction will probably take you down to just the current basic state pension level. That foundation amount will then be increased if appropriate for years worked after the flat rate is introduced.

Each year worked after the introduction of the flat rate state pension will increase your pension by 1/35th of the flat rate level until you reach that level. So you will probably get something like basic state pension plus 2/35 * 155.

excelpaul wrote: »

I believe I also received some credits for my time at university and when I worked part time in various jobs at weekend and during school/university holidays between the ages of 16 and 23.

Yes, you would have received up to three years of juvenile credits. Those count as years towards the basic state pension and new flat rate state pension but don't add anything to the additional state pension part.

jamesd

okydoky wrote: »

Latest forecast shows 41 qualifying years so basic of £113.10 plus ASP + GRB of £73.53. ... I was Contracted Out between 1993 and 2005, so my question is :- Will my ASP be reduced pro rata for the 12 years I was Contracted Out, or will it only be reduced for the 4 years between 1993 and 1997?

Here's how it works for various date ranges:

From 1978/79-1996/97: there was a guaranteed minimum pension for those who contracted out. This GMP will be calculated and used as the contracted out deduction for these years.
From 1997/98-2001/02: no Additional State Pension was added so there is no contracted out deduction for time contracted out during these five years.
From 2002/03-flat rate: a similar calculation to the 1978/79-1996/97 calculation is used to get a contracted out deduction.

You have five years where no contracted out deduction is needed and seven where it is needed. So your contracted out deduction would very roughly be 7 / (total number of years working while the SERPS and S2P systems were in place) * ASP. Don't include the GRB part in that, just the ASP part. Only roughly because ASP depends on income and your income probably changed.

Graduated Retirement Benefit was introduced in April 1961 and replaced with SERPs then S2P from April 1975 onwards.

System

Many thanks for your detailed response Jamesd. Much appreciated.


E.

okydoky

Yes Jamesd, thank you the explanation which along with link means for the first time ever, I am starting to understand the wonders of our State Pension system!

jem16

jamesd wrote: »

You will receive less than the full flat rate. What you will get as a foundation amount is the flat rate, which is expected to be around £155 when it starts after inflation increases, less a contracted out deduction for the years when you were contracted out. Since it is likely that you have been contracted out for all of your working years that deduction will probably take you down to just the current basic state pension level.

Probably pedantic as the end result is the same but my understanding of how it works is this;

Your state pension will be calculated under the current rules and under the new rules. Your foundation amount will be the higher of the two.

Under the current rules, anyone who is contracted out for all of their working life ( assuming at least 30 years NO contributions) will receive only the basic state pension with no SERPS/S2P but perhaps a very small amount of graduated retirement benefit. So likely to be around £113pw.

Under the new rules and assuming 35 years NI, the flat rate of £144 will then have a contracted out deduction. On one of the other threads someone in a similar position ended up with around £40pw after the deduction.

With the calculation under the current rules being higher, that then becomes the foundation amount.