New State Pension starting amount and full record of qualifying years- trial service

Synonymous

Thanks for the link Snowman - it's been interesting to see this information.

I wanted to run this past you all as it just seems like a small amount to me, even though I'm only 31.

11 years of full entitlement with a current amount of £50.09/wk. Four years of gaps due to uni. I've been contracted out for 6 of those years I think, although they are still showing as full, except one when I studied and worked part-time. So to get the full amount I'd have to work another 25 years? Doesn't feel like I've made much progress!

I also wondered, I have 2 gaps which I can top up. One in which I made about £2k in contributions, and one in which I made less than £200, but the cost to top them up is almost the same - around £350-£380. I'm not sure why that is? Is it just a flat rate set for each year?

redmalc

I have just received my state pension statement and reads as follows,
State pension in 2020 £172.33 per week based on 43 qualifying years.
Below it states COPE ££55.01 per week
Then it reads add the two together £227.34 with the cope part being paid by your private pension
As I read that the state pension element is £172.33 per week will be paid,am I correct.?
Regards

neilvw

redmalc wrote: »

I have just received my state pension statement and reads as follows,
State pension in 2020 £172.33 per week based on 43 qualifying years.
Below it states COPE ££55.01 per week
Then it reads add the two together £227.34 with the cope part being paid by your private pension
As I read that the state pension element is £172.33 per week will be paid,am I correct.?
Regards

Your NI record will be checked some months after the end of this tax year. The amount you built up under the old system up to April 2016 will be compared with what you would have got, had the new State Pension (nSP) system been in place throughout your working life. The higher of the two will be your foundation amount.

The higher of the two for you is clearly under the old system, with plenty of SERPS etc despite some contracting-out.

You cannot increase your entitlement through further work/credits as you are above the full nSP amount.

The first £155.65 (in 2016/17 terms) will be increased (both before and after SPa) by the triple lock until at least the end of the parliament (2020). The additional £17 or so will be your protected amount and will increase with CPI inflation (both before and after SPa). Your contracted-out private pension is estimated to pay a further £55. How that is revalued and increases in payment depends on the details of the private scheme and when you were in it, etc.

SPa = State Pension age

ericonabike

Found this thread whilst doing some research, having already got info via the Beta pension forecast site. Incidentally I found that really helpful, and managed to get the Verify thing out of the way first time via the Post Office. I used the web version rather than going through smartphone and it was completely painless.

I am 59 and took early retirement from public sector in 2011 so delighted to find I have 40 years full NI contributions, even though I don't really understand why. On my current record I will be due £121.24 a week, but it appears I can buy added years any time between now and 2022, my official retirement year, which would bring me up to max. And so it seems I have not lost out by being contracted out?

PS, many thanks to snowman and xyxlophone for their erudite contributions. Even though I don't always understand them, it's good to know they're there!

roxy28

ericonabike wrote: »

I am 55, but it appears I can buy added years any time between now and 2022, my official retirement year, which would bring me up to max.

My dad is 60 and gets his SP in 2022, you are only 55?

ericonabike

Doh! Amended to 59....

SnowMan

ericonabike wrote: »

I am 59 and took early retirement from public sector in 2011 so delighted to find I have 40 years full NI contributions, even though I don't really understand why. On my current record I will be due £121.24 a week, but it appears I can buy added years any time between now and 2022, my official retirement year, which would bring me up to max. And so it seems I have not lost out by being contracted out?

You can't increase your Starting Amount at April 2016 because you already have more than 35 Qualifying Years. You must have been about 55 when you gave up work so just about enough room to have squeezed in 40 years from the 6th April before your 16th birthday. Remember that in terms of qualifying for the basic state pension it doesn't matter if it is a full contracted-out or full contracted-in year.

But you can earn an extra £4.45pw (1/35 of the full new State Pension of £155.65 in 2016/2017 terms) for each post April 2016 Qualifying Year.

You should have either 5 or 6 potential post April 2016 Qualifying Years depending on which side of 6th April your SPA falls.

If it is 6, then by paying class 3 voluntary contributions for those 6 years it will get you up to about £148pw (6*4.45 + 121.24) so close to but not quite up to the full new State Pension of £155.65pw.

The provisional rate of class 3 contributions for 2016/2017 seems to be £733.20 (= 14.10pw x 52) which is obviously cheap to buy one extra year before tax state pension of £4.45pw (£231.25pa) in 2016/2017 terms. They could change the class 3 rate in the budget, and future class 3 rates could change significantly, but you'd guess it will remain a good deal

(note the online system seems to have been changed to show amounts in 2016/2017 terms so I've assumed that the £121.24pw above is in 2016/2017 not 2015/2016 terms)

Even though I don't always understand them, it's good to know they're there!

:rotfl::rotfl:

xylophone

Even though I don't always understand them,

"Misunderstood" is bad enough but not understood at all......Aarrg!:eek:

Bring on the man in the white coat!:)

SnowMan

Synonymous wrote: »

Thanks for the link Snowman - it's been interesting to see this information.

I wanted to run this past you all as it just seems like a small amount to me, even though I'm only 31.

11 years of full entitlement with a current amount of £50.09/wk. Four years of gaps due to uni. I've been contracted out for 6 of those years I think, although they are still showing as full, except one when I studied and worked part-time. So to get the full amount I'd have to work another 25 years? Doesn't feel like I've made much progress!

'Full' years just means it is a Qualifying Year and so counts as a year towards the 30 required for the basic state pension (under the old rules). It doesn't matter whether it is contracted-out or contracted in, for working out whether it is a Qualifying Year.

Assuming your figure is before they flipped the system to be on 2016/2017 rates (i.e. £151.95 vs £155.65 full new state pension), then your starting amount has been calculated as

OLD RULES
= (11/30 x 115.95) + 7.58 (additional pension)
= 50.09pw

NEW RULES
= 11/35 x 151.95 - deduction for contracting-out for 6 years
= something less than £47.75pw

Higher is old rules of £50.09pw

Remember also that the 2015/2016 year isn't registered yet so may be a Qualifying Year also so the '11' above may change to '12' when the starting amount is calculated.

I also wondered, I have 2 gaps which I can top up. One in which I made about £2k in contributions, and one in which I made less than £200, but the cost to top them up is almost the same - around £350-£380. I'm not sure why that is? Is it just a flat rate set for each year?

The rates for contributions that are still in time (provided they are paid by 5th April 2019) are

2006/2007: 13.25pw (£689 for 52 weeks)
2007/2008: 13.25pw (£689)
2008/2009: 13.25pw (£689)
2009/2010: 13.25pw (£689)
2010/2011: 12.05pw (£626.60)
2011/2012: 12.60pw (£655.20)
2012/2013: 13.25pw (£689)
2013/2014: 13.55pw (£704.60)
2014/2015: 13.90 (£722.80)
2015/2016: 14.10pw (£733.20)

If you've already got a number of weeks credit towards any of these years then the cost is the number of missing weeks x the weekly rate.

There is no gain to paying class 3 contributions if you are likely to get up to the full new State Pension of £151.95pw (in 2015/2016 terms) through post April 2016 Qualifying Years (without purchasing some missing pre April 2016 years).

Chickereeeee

Chickereeeee wrote: »

They have admitted thet the site is giving incorrect results in 'a small' number of cases, so I would not bother for now anyway. The results cannot be trusted.

C

The site now says it cannot calculate the quote in my case.

Is that the same for others with 'odd' quotes?

C