State Pension Calculator

caveman38

Does a calculator exist to estimate projected pension based on contributions both contracted in and out. I know that you can ask for a statement. But after having one I'm convinced it is incorrect and would like to work it out roughly myself.

mgdavid

probably not because SERPS / S2P is Graduated so I think any calculation needs to know how much you earned, each week or month. Do you have all your payslips?
I am presuming by 'statement' you mean a State Pension statement, but have you also asked for a statement of your NI contributions?

caveman38

mgdavid wrote: »

probably not because SERPS / S2P is Graduated so I think any calculation needs to know how much you earned, each week or month. Do you have all your payslips?
I am presuming by 'statement' you mean a State Pension statement, but have you also asked for a statement of your NI contributions?

I have been given a State Pension statement for when I retire at the end of 2016. I have been told that I will get £121. But seeing as I am being assessed on the old scheme I still cannot see it's right. I am told that I need 30 years of contributions and have 48. But are only the first 30 used. I had 1968-1990 employed with contracted out and the 1990-2016 credits which I assume are the same as full NI Serps contributions.
Even so I have a projected pension of only £6 above minimum.

SnowMan

caveman38 wrote: »

I have been given a State Pension statement for when I retire at the end of 2016. I have been told that I will get £121. But seeing as I am being assessed on the old scheme I still cannot see it's right. I am told that I need 30 years of contributions and have 48. But are only the first 30 used. I had 1968-1990 employed with contracted out and the 1990-2016 credits which I assume are the same as full NI Serps contributions.
Even so I have a projected pension of only £6 above minimum.

My best guess to explain this is:

BASIC STATE PENSION
You need 30 years under the existing scheme to get the full basic state pension £115.95pw, additional years above that earn you nothing.

ADDITIONAL STATE PENSION 1978 TO 5th APRIL 1997
For the period you were contracted-out it is possible that you earned a negative additional state pension. Although you may have also been contracted-in for some years and earned positive additional state pension for those years, the negative bit may be bigger than the positive bit. The overall additional pension for this period can't be negative, so you may well have zero additional state pension.

ADDITIONAL STATE PENSION FROM 6th APRIL 1997
This is where your £6 comes from


So you might ask 'how can my additional state pension be negative for the contracted-out period, surely it is zero?'

The answer is that it is down to the quirky way additional state pension was calculated. For the period to 1997, they take the additional state pension that you would have earned had you always contracted-in throughout (call this A) and deduct a contracted-out deduction for the period you were contracted-out (call this and that is your additional state pension. A is calculated in a slightly different way to B, for example where you have contracted-out through a defined benefit scheme B can often increase at a higher rate up to SPA than A. And so B can be bigger than A. You aren't actually losing out because your contracted-out scheme has to provide a benefit of at least B (which can be higher than A) and this compensates for your additional state pension being negative for some periods. In algebraic terms, the state pays you A-B in additional pension and your contracted-out scheme pays you B as contracted-out pension, and A-B+B = A overall. A person who has contracted-in throughout also gets A, but in that case A is paid in full by the state as additional pension.


It is extremely complicated and very hard to explain simply. The above is my best attempt to do this, although I am also guessing due to lack of information.

greenglide

the 1990-2016 credits which I assume are the same as full NI Serps contributions.

Credits are very different from "full" contributions. We're these because you weren't through unemployment, sickness, caring etc?

In the days of SERPS all they would get you was a qualifying year so would not give any Additional Pension. Once S2P had replaced SERPS in 2002 it was much more generous to low earners and to people on credits for sickness etc but i still wouldnt expect much.

As already stated to need a statement of your NI contributions available by online request to HMRC here https://online.hmrc.gov.uk/shortforms/form/NIStatement

Paul56

"Does a calculator exist to estimate projected pension based on contributions both contracted in and out. I know that you can ask for a statement."

A very good question. I've had the basic statement for the NSP but it doesn't explain how my COD was calculated. The Pension Service say they can provide a more detailed calculation - I'm waiting for their response. Has anyone else had a more detailed statement? Do they in fact explain how the COD was calculated?

mgdavid

do a forum search for COD - one of the more knowledgable posters has done a full and detailed discussion and calculation a few weeks ago.