Ex Serviceman and new State Pension Rules

james_mason

Can anyone help me please? I was in RAF 1972 to 1994 under the AFPS75 pension scheme. At the time we were not told that we would be paying less National insurance to cover the scheme. I do not receive my state pension till July 2019. But received a statement other day saying I have 38 years of national insurance payment but because I was contracted out I would be getting a lot less pension than I would if I had not been. I know they give me a quote of 30 year of NI payments and 35 year and say I will get the higher payment when I am 65. But there is no guarantee of this yet. Can anyone tell me when AFPS75 actually started and how much less NI contributions I was paying? Also Would I still have been it in 1994? Thanks

greenglide

At the time we were not told that we would be paying less National insurance to cover the scheme

The scheme documentation would have said that you were contracted out of the state scheme. At the time most employees would have considered this as "good" because you were paying less. The benefit promised by the scheme was and still is much better that the additional pension you could have earned from the state scheme.

But there is no guarantee of this yet

You will get a figure "close" to the estimate, they cannot be exact as the contracted out deduction cannot be precisely calculated until you reached SPa.

Have you been working since 1994? If so were you in contracted out employment then?

james_mason

I have worked about 18 years since I left the service. I believe most of my jobs I was contracted in. I had 30 years of NI so I even stopped signing on between jobs thinking I had enough years. But now with extra 5 years think I will be signing on again. Wish I kept my pay slips

greenglide

So your pension statement should have an "old rules amount" of significantly above the £113 basic pension amount.

You are talking about one of the "new" ones which show the old and new rules calculations?

It should also show the number of qualifying years you have?

molerat

You have enough years and having paid any more would not increase what you will get under the new scheme - you would still get the higher of the new 35 years less the contracted out deduction or old 30 years plus S2p. From 2016 you will be able to add more years giving you around £4.25 each per week on top of what your statement shows.

james_mason

Statement says I have 38 years. existing pension rules say I should get £129.95 a week. But new rules say I should get £78.51 a week. Wish seems very low for me. I appreciate this is an estimate and figures will change. Sorry how do they work the contracted out deduction?

xylophone

You get the higher of the two.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

atush

plus any extra s2p until april 2016, then you accrue an extra 4 quid or so a week for every extra year you pay in after that.

So look at getting a new statement next year when the new rules come in.