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

SnowMan

wary wrote: »

My "Forecast" tab says:
Amount based on your latest National Insurance record (5 April 2015) £151.80
Amount you may get to if you continue to contribute £155.65

However, the "How To Increase It" tab confirms I have 35 qualifying years and simply says "You cannot improve your forecast any further."

How can I tell how many additional qualifying years I now need to accumulate post Apr-2015 to get the full amount specified on the Forecast tab?

You can earn 1/35th of the full single tier pension, £4.45pw in 2016/2017 terms, for each Qualifying Year after 5th April 2016 until you reach the full single tier amount of £155.65pw (2016/2017 terms).

So you will need 1 post 5th April 2016 Qualifying Year to get you up to the full single tier amount.

2015/2016 is pre April 2016, and because you already have 35 Qualifying Years you can't increase your starting amount at April 2016 (apart from potentially earning a small amount of additional pension for 2015/2016).

So it is a single year post 5th April 2016 (2016/2017 onwards) that you need.

Hopefully when the 2015/2016 year has been incorporated into records the DWP will start showing how many post April 2016 are needed to get people up to the full single tier pension (e.g. you will neeed 3 out of a possible 6 years sort of thing).

SnowMan

molerat wrote: »

..........Or are they assuming I may receive some additional pension for this tax year (which I will not) and it will square itself when the 15-16 contributions (of £0) are in ?

A point that may cause confusion to some is that it blandly states that "you may improve your forecast by filling them" and gives me the cost of the pre 2016 years. I, and most of us here, know it will do no good but it could lead others to buy some of those years.

From earlier experiences reported, I think you are right they are making a blanket assumption that someone will earn some additional state pension for 2015/2016 in working out what state pension you can get up to.

I agree they need to give clearer information on improving your state pension, so people can identify not just whether they can increase their starting amount but whether it has the potential to be wasted money (because they can get up to £155.65pw through post April 2016 years).

wary

SnowMan wrote: »

You can earn 1/35th of the full single tier pension, £4.45pw in 2016/2017 terms, for each Qualifying Year after 5th April 2016 until you reach the full single tier amount of £155.65pw (2016/2017 terms).

So you will need 1 post 5th April 2016 Qualifying Year to get you up to the full single tier amount.

2015/2016 is pre April 2016, and because you already have 35 Qualifying Years you can't increase your starting amount at April 2016 (apart from potentially earning a small amount of additional pension for 2015/2016).

So it is a single year post 5th April 2016 (2016/2017 onwards) that you need.

That's good to hear as 2016/17 will take me up to 55 and MAY be my last working year.

Thanks for the info.

33Lurcher

I used the online service yesterday after remembering that I had registered for the Gateway a couple of yrs ago , supplied the info they wanted off last yrs P60 and forecast was £124.18 with 43 yrs contributions , it did say I can increase that amount to £125.34 if I continue to contribute .
I retired in 2009 and finished NI contributions then , SP due Jan 17.

SnowMan

33Lurcher wrote: »

I used the online service yesterday after remembering that I had registered for the Gateway a couple of yrs ago , supplied the info they wanted off last yrs P60 and forecast was £124.18 with 43 yrs contributions , it did say I can increase that amount to £125.34 if I continue to contribute .
I retired in 2009 and finished NI contributions then , SP due Jan 17.

The difference between £125.43pw and £124.18pw is because the DWP are making a blanket assumption that everyone will earn some additional state pension for the 2015/2016 year, but if you have retired this won't be the case, so your state pension will be £124.18pw.

Because you already have 35 Qualifying Years you cannot increase your starting amount at April 2016, even if you have some missing years.

Because you reach SPA in January 2017 there are no possible (complete) post April 2016 Qualifying Years to earn more state pension.

So essentially your state pension will be about £124pw.

33Lurcher

Yes thanks Snowman , thats what I was thinking .

GunJack

SnowMan wrote: »

I completely agree with you there.

The 'What affects it' tab should be renamed 'How my starting amount is calculated'

Then on that tab they should show a breakdown of the calculation, so it might say for example


Your starting amount of £152.19pw is the higher of the amount you have earned to date based on the existing state scheme (Old Rules) and the new state scheme (New Rules). In your case the Old Rules calculation is higher.


OLD RULES
= Basic state pension + additional state pension (allowing for c/out)
= 30/30 x 119.30 + 32.89 (additional state pension)
= 152.19

NEW RULES
= 35/35 x 155.65 - COPE* (deduction for contracting-out)
= 155.65 - 29.44
= 126.21


*The deduction for contracting-out (COPE) of £29.44pw under the New Rules calculation is because you contracted-out of the additional state pension in the past and so will normally have earned a roughly equivalent amount in your private pension arrangements, that you would not have earned had you been contracted-in.

(optional para) Someone in the identical position as you, apart from their having been contracted-in to the additional state pension throughout, might have had a starting amount of £181.63pw (152.19 + 29.44) but they would have not have had the extra money in their private arrangements that would normally make up the £29.44pw difference from your starting amount.

Those two additional paras are better, but I think it would be better explained if they did it the other way round, e.g.:-

"your starting amount is £xxx.xx Basic SP, plus £xx.xx Additional SP for years you were Contracted In to SERPS/S2P.

If you were Contracted Out during your working life, in addition to the above amount, you will be paid by your private pension provider an amount in accordance with the benefits earned in that scheme. For an estimate of this, contact your contracted-out provider"

This would do away totally with the awful COPE stuff, which is guaranteed to confuse many and lead to outcry on a scale bigger than WASPI ......

roxy28

Just got a SP estimate for dad, he is 60 and retired and no plans to change this.
He has 42 full years, 6 years to contribute and the last 2 tax years 2013/14 and 2014/15 not enough contributions. He can pay voluntary contributions for year 13/14 of £722.80 and year 14/15 of £704.60 by 5th april 2023?

Also says the shortfall may increase after 5th april 2019.

It states his pension will be £139.94.
Cope = £47.47
Cope added to SP forcast = £203.12.

How many years voluntary contributions would get him a full £155.00.
Any explanations about the above would be helpful.

GunJack

buying earlier years probably wont help, but 3-4 years post-apr16 would..

xylophone

Your father is drawing his occupational pension - he already has 35 years + in the current scheme so no point buying old years.

However, "new years"..... see http://citywire.co.uk/new-model-adviser/news/steve-webb-how-to-boost-new-state-pension-payments/a827032

Class 3 NI for 2016-17 remains £14.10 a week.

https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2016-17/tax-and-tax-credit-rates-and-thresholds-for-2016-17