New state pension question

greenglide

I thought that a "discounted" rate was promised after 5/4/2016 as the MSE article said but that nothing had been heard of it since?

The assumption was that the rate for post 5/4/2016 voluntary contributions would be announced in the autumn statement along with the confirmed rate for the nSP standard rate?

SnowMan

greenglide wrote: »

I thought that a "discounted" rate was promised after 5/4/2016 as the MSE article said but that nothing had been heard of it since?

The assumption was that the rate for post 5/4/2016 voluntary contributions would be announced in the autumn statement along with the confirmed rate for the nSP standard rate?

In that part of the article when they mention the discount they seem to be referring to pre April 2016 missing years, why else mention the 6th April 2019 deadline.

We are hoping that rates to purchase post April 2016 qualifying years will remain generous in the same way that buying pre April 2016 years have been, and we are assuming those rates will be announced in the Autumn statement.

gadgetmind

SnowMan wrote: »

Getting a statement now does show you the minimum you might get i.e. the old scheme basis, and if your amount is above £151.25pw then you know the new scheme calculation won't bite.

I should *just* be there. The last time I managed to get a statement was in August 2013, at which point I had 31 years and £30.29 S2P. S2P was accrued £2.81 in 2013 versus £2.99 in 2012 as it's being tapered, but I should hopefully be just over the £151.25pw by now.

My wife is miles off with only 28 years in 2013 and zero S2P, so she's going to need a fair few more years as they'll also have some RDA to subtract due to being contracted out into a PP for a few years.

[Deleted User]

If you look earlier in the MSE guide I linked to, there is a full lowdown on buying pre 2016 added years, including costings. So I sort of thought (maybe I'm wrong) that the final paragraph is about post 2016 added years and the possibility that they may be discounted for folk with 30 years as at the change date (6 April 2016) but not 35? I don't understand the reference to 2023 in the paragraph, as pre 2016 added years need to be bought by 2019. I'm very new to all this, so I may be completely wrong!

hjd

Deleted_User wrote: »

I've had a more detailed look at my recent pension statement.

First of all, it is dated 3 November 2015 and written on a pro forma with the edition date of 07/15. It is accompanied by booklet DWP042 (08/2015 edition).

It starts off: You ask for an estimate of your State Pension based on the rules of the new State Pension that starts on 6 April 2016.

It the states: We estimate that your State Pension will be £119.87 a week. This is based on your NI contribution record up to tax year 2014/15 only, which shows that you have 33 qualifying years.

It goes on: The amount of State Pension you get when you reach your State Pension age on ( giving the actual date of my 66th birthday in 2023, not repeated her for anonymity purposes) may be higher than the amount shown above (but presumably not lower, I suppose).

Over the page, it says, under heading "Adjustment because you have been contracted out of the additional State Pension": Before 6 April 2016, the SP is made up of the basic SP and the additional SP. We have adjusted your SP to take account of the time you were contracted out of the additional SP. When working out your SP estimate amount, we have made a deduction of £44.65 per week because you have been contracted out.

The addition of £44.65 to £119.87 comes to more than £151. Can I deduce from this that my higher estimated figure is NOT the new SP? I think not, but maybe someone could confirm that?

Again, thanks for all help. I'm currently dragging a letter to DWP seeking more info as to my estimates under the old and new schemes.

Sorry to hijack your thread but very similar circumstances.
My statement is exactly the same (apart from figures and dates).

We estimate that your State Pension will be £148.86 a week. This is based on your NI contribution record up to tax year 2014/15 only, which shows that you have 41 qualifying years.
When working out your SP estimate amount, we have made a deduction of £8.99 per week because you have been contracted out.
I also reach SPA in 2023 and am still working - so in my case presumably I should get additional contribution/credit for 2015/16 which will take me up to £151.25, so no point in paying anything additional? I should ask for another forecast next year once they have added 2015/16 to be sure?
I don't understand how I had 41 years of contributions given that I have just had my 58th birthday: I was at school till I was nearly 18 then at university for 3 years, although I did have holiday jobs.

SnowMan

Deleted_User wrote: »

If you look earlier in the MSE guide I linked to, there is a full lowdown on buying pre 2016 added years, including costings. So I sort of thought (maybe I'm wrong) that the final paragraph is about post 2016 added years and the possibility that they may be discounted for folk with 30 years as at the change date (6 April 2016) but not 35?

The deadlines for purchasing (say) the 2017/2018 year are not 5th April 2019 or 5th April 2023, so it can't be talking about post April 2016 years and make any sense. It is almost certainly as explained earlier.

But only the writer of the item can explain what they meant.

MSE may have some inside knowledge of some extra scheme that is about to be announced, that co-incidentally happens to have the same deadlines as for buying pre April 2016 qualifying years, but I very much doubt it.

I don't understand the reference to 2023 in the paragraph, as pre 2016 added years need to be bought by 2019

5th April 2023 is the absolute deadline for paying voluntary contributions for pre April 2016 years. 5th April 2019 is the deadline for paying at the rate that applied for the year in question.

For example a missing 2010/2011 tax year can be purchased at £12.05pw if the class 3 contribution is paid before 5th April 2019. But if paid between 6th April 2019 and 5th April 2023 then the rate goes up to the current rate then (the current rate now is £14.10pw).

See also

https://forums.moneysavingexpert.com/discussion/4559847

[Deleted User]

Thanks SnowMan, your last post does make sense. I'm clutching at straws because I find myself short on years under the new scheme, having previously congratulated myself on getting past the old scheme maximum. I don't know enough to shout "unfair" but I'm still a bit confused as to how I've got into this situation but there it is.

greenglide

I don't understand how I had 41 years of contributions given that I have just had my 58th birthday: I was at school till I was nearly 18 then at university for 3 years, although I did have holiday jobs.

Everybody gets credits (three years?) from leaving school and if you started work before the current graduated national insurance scheme started (in 1976?) you could get a qualifying years having just paid one stamp as the records from those days are very poor.

gadgetmind

Deleted_User wrote: »

I don't know enough to shout "unfair" but I'm still a bit confused as to how I've got into this situation

What situation? You won't get any less than under the old system, so what's the problem?

[Deleted User]

I suppose I mean by the situation the fact that I don't really understand the transitional arrangements between the old and the new. And I'm clearly not being given enough information, and explanation, by DWP to make fully informed decisions. Not good enough from a government scheme into which we are all enrolled if working and paying compulsory NIC. Your view may vary.