Continue signing-on to increase the new state pension.

sav500

I finished my job at Xmas 2014 after 32 yrs service age 48. Since then I have been signing-on for Jobseekers Allowance (jsa) which I am entitled to for six months. This ends next week and although the jsa money finishes I can carry on signing to get NI Credits which go towards my state pension. I won’t be eligible for this for another 18 yrs.
During my 32 yrs working I was paying into the companies DB pension scheme and contracted out of the Second state pension. I understand, I think, that this will reduce my New State Pension (post 2016) amount. I will also only have 32 yrs stamp . You need 35 yrs for the New State Pension. I believe that I will qualify for the full single persons State Pension in the current scheme (£115/wk).
My question is how much has contracting out reduced my New state pension entitlement and is it worth continuing to signing-on to make up this amount lost? Thanks for your help.

xylophone

You will get a new scheme valuation for your "foundation amount" after 6 April next year.

You can then build on this amount whether by credits or contributions up to state pension age.

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

https://www.gov.uk/new-state-pension/eligibility

Paul56

Cheers for this Xylophone. I have had an estimate for my NSP, state pension age 2022 - I am now retired/ a carer. I am trying to work out how they calculated my reduced NSP for being in a DB scheme for 7 1/2 years. So this may help. Then on to what impact the pension arrangements may have directly on my DB pension......

xylophone

Then on to what impact the pension arrangements may have directly on my DB pension......

You have pre and post 88 GMP?

Public or private sector?

xylophone

a carer.

You saw the information concerning credits for carers?

Paul56

I was in the DB scheme 1 Oct 97 to 30 Apr 05. My statement of benefits does not quote a GMP but rather a post 5 April 1997 Scheme pension. I started work in 1996 in a private company that had its origins in a government department that was privatised in the early 1990s so this was the continuation of a public sector scheme. Shortly after I joined the DB scheme new entrants were only offered a stakeholder scheme.

Paul56

"My question is how much has contracting out reduced my New state pension entitlement"

sav500, I don't know how you will be affected. But here's an example of what can happen: 36 qualifying years, but contracted out for 7 1/2 years. They have reduced my NSP to 91% of the full amount, by £ 706 per year.

sav500

Thanks Paul56, you have 7 1/2 yrs contracted out and 35-7 1/2 yrs contracted in? I only have 32 yrs and they are contracted out except for the last 6 mths signing on NI credits.

xylophone

My statement of benefits does not quote a GMP but rather a post 5 April 1997 Scheme pension.

The GMP system ended before you took up employment in October 1997.

Paul56

sav500 wrote: »

Thanks Paul56, you have 7 1/2 yrs contracted out and 35-7 1/2 yrs contracted in? I only have 32 yrs and they are contracted out except for the last 6 mths signing on NI credits.

sav500, you are in a bit of a spot as you can't get a statement until April next year. State pension "reform" hasn't stopped. The gvnt has bought in Ros Altmann, and one of the things she is looking at is raising the state pension age (again!). Just no idea whether trying to build up qualifying years through JSA would make any sense.

sav500

Your right Paul56, I'm going to sign off next week.