State pension statement ......confused !!!

spire2003

I sent for & received a State pension estimate statement. On the front it tell me the estimate is £140.60 & currently I have 41 qualifying years.
On the reverse of the statement there is another section about adjustments because I was contracted out of the additional State pension. £56.29 has been deducted from my estimate amount because of this.
I am confused regarding the figures. Is my estimate for £140.60 LESS the £56.29 making it £84.31 or is it a case of it WOULD have been £196.89 had I not been contracted out ( £140.60 + £56.29) ?

GibbsRule_No3

Mine was £123.47 and then £39.43 had been taken off for the contracted out years, this was over 45 years. So the £123.47 is what they are forecasting for me. So your £140 will be the amount, so yes it could have been more.

molerat

Does the front page not state "your starting amount estimate" ? Both the old and new systems had CO deductions but the old one stopped mentioning them. I have not seen one of the new "less confusing" statements but I believe the front page shows the what you will get figure just as the old easy to understand "confusing" ones did.

greenglide

I thought it only told you the amount of the deduction (the Rebate Derived Amount) if the estimate was based on the new rules but if the estimate was under new rules (so the new rules amount after the deduction of the Rebate Derived Amount was greater than the old rules amount) with a deduction of £56.29 it could not exceed £155 (or whatever the amount is) as this is the maximum new rules amount.

The figure on the front is the amount you are estimated to get.

Suzanne_M

Does anyone know what will happen to the Additional State Pension element when the new state pension starts in 2016. I am sometime off retirement, but have already built up a reasonable amount of additional state pension & am concerned that this might be lost in the new system - I very much hope not. Thanks. Sue

jem16

Suzanne_M wrote: »

Does anyone know what will happen to the Additional State Pension element when the new state pension starts in 2016. I am sometime off retirement, but have already built up a reasonable amount of additional state pension & am concerned that this might be lost in the new system - I very much hope not. Thanks. Sue

It won't be lost. Under transition arrangements you will get the higher of the two calculations under both current and new rules. After April 2016 you will get your foundation amount.

What age are you? Have you applied for a pension forecast?

p00hsticks

jem16 wrote: »

It won't be lost. Under transition arrangements you will get the higher of the two calculations under both current and new rules. After April 2016 you will get your foundation amount.

What age are you? Have you applied for a pension forecast?

Although you are correct, if the OP is still some way off retirement and so has a pension of less than £155 under the existing rules, then unfortunately for them it may turn out that there was little benefit in earning this additional element. The only benefit to them will be that they reach the maximum pension amount (of around £155) earlier than they would have otherwise ....

xylophone

Get a pension forecast.

See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

Re revaluation and increase in payment

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181229/single-tier-pension.pdf

" However, as the single-tier pension will be uprated each year, at least in
line with the growth in average earnings, the value of the pension will increase over time. Further
information can be found in Chapter 5.

Uprating the protected payment
100. In the current system, each individual’s additional State Pension is revalued up to their State
Pension age in line with average earnings. It is then uprated in line with the increase in prices
(CPI) when in payment. The protected payment – the difference between an individual’s
foundation amount and the full level of the single-tier pension – will be both revalued and
uprated in line with prices."

Suzanne_M

Thanks for your replies. It is my understanding too that as my basic state pension plus additional state pension is almost the same as the new state pension, I will merely get the new basic state pension. At the age of 45 I already have 29 paid up years & am dismayed that I effectively lose this money when I could have opted to contract out and paid a lower level of national insurance but decided not to as it would have been worth it in the form of the additional state pension.
How do I reclaim all the extra national insurance I have been paying if I'm not going to get the additional state pension.
It seems so wrong for someone who has paid out since leaving school at 16 and paying full rate national insurance for 29 years
How to lobby the government?
Thanks
Sue

p00hsticks

Suzanne_M wrote: »

How do I reclaim all the extra national insurance I have been paying if I'm not going to get the additional state pension.
It seems so wrong for someone who has paid out since leaving school at 16 and paying full rate national insurance for 29 years
How to lobby the government?

Writing to your MP would be the obvious first step , although I'm not sure how far you'll get.

Unfortunately there are always going to be inequalities in the system - for example someone who left school at 16 and is retiring today could have nearly 40 years of NI contributions but still only get the same amount of pension as someone with just 30 years.

You've never been able to stop paying/reclaim NI once you've paid enough to have a full pension, and I can't see them changing that now.

greenglide

At the age of 45 I already have 29 paid up years & am dismayed that I effectively lose this money when I could have opted to contract out and paid a lower level of national insurance but decided not to as it would have been worth it in the form of the additional state pension.

@Suzanne M You claim that you had the chance to Contract Out but chose not to so you could get the extra Additional Pension. It is most unusual for employers running a Defined Benefit pension scheme to offer this option to their employees as it costs them more in employers NI with no advantage to them.

Are you sure?