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

SnowMan

bigfreddiel wrote: »

I have 47 years worth of contributions, seems a lot but there you go, and July is when I reach 65. So they won't be adding £1.75 to my current amount.

I've been contracted in for the last three years and earn more than £15.3k, so I guess I qualify for some additional earnings related amount, so what is the percentage of my income I should expect to see?

I'm already over the new state pension amount, does that make any difference?

Cheers fj

No reason you shouldn't get the £1.75pw amount. There are 3 additional bits of extra state pension that could be earned in 2015/2016 to form part of the old rules starting amount. In your case:

BASIC STATE PENSION: no further accrual is possible as you alreday have the 30 year maximum

S2P (FLAT RATE COMPONENT): £93.60pa. No reason why you shouldn't get this as you are working and contracted-in.

S2P (EARNINGS RELATED COMPONENT): As you have earnings between about £15,300 and £40,040, and are contracted-in then you should get some of this. This is earned at 10% of this band over the working lifetime. So if you were earning say 30K in 2015/2016, you might get 0.1 x (30000 - 15300) /49 = £30pa (very rough calculation only)

So in that example your starting amount based on qualifying years up to April 2015 might increase by £123pa (0 + 93 + 30) = £2.37pw, through 2015/2016 accrual.

The best way to find out is to wait until 2015/2016 year has been incorporated into starting amounts. Because of the complicated way additional pension is calculated, you can't just assume you will get about £2.37pw (say) extra as above.

bigfreddiel

Thanks snowman, very nicely explained, when I get my sp I will post the amount here, it's due in July, just received my letter from DWP saying I can claim it. Just to repeat the forecast is £155.77

Cheers fj

Just checked the forecast

As of 5 April 2015 £153.74

As of 5 April 2016 £155.77

So 2015/16 is worth £2.03

Only 34p difference snowman which I guess is as good as it gets, fine by me

afc80

My NI record says the following

Summary
32
years of full contributions

18
years to contribute before 2033

1
years when you did not contribute enough

How to increase your state pension

1. Continue to pay National Insurance contributions

You cannot improve your forecast any further. You'll still need to pay contributions as these fund other state benefits and the NHS.

My pension estimate is as follows

The earliest you can get your State Pension is 14 December 2033 when you'll be 67, your estimate is
£155.65 a week


Breakdown

Amount based on your latest National Insurance record (5 April 2015)
£126.44 a week
which is £549.79 a month, £6,597.46 a year

Amount you may get to if you continue to contribute
£155.65 a week
which is £676.80 a month, £8,121.59 a year

I have been in local govt for 29 years (contracted out) but hmrc says i have 32 years of full contributions (how is this so given i have contracted out for 29).

i had a proper job prior to entering local govt. :)

And if the 32 full years is indeed correct does that mean i have only 3 years to go to get my pension?

Yorkshire_Pud

I got my paper copy of my NI record and luckily I have 35 qualifying years so no benefit to buy any pre 2016 years.

My estimate for getting my pension in 2021 was £135 if I make no more NICs and £155 full pension if I buy the NSP NICs for the next 5 years.

I guess the reason my 35 years don't immediately qualify me for the full amount is because I had many Contracted Out years!?

So on the face of it I need to work out if I want to pay the forthcoming NICs as I no longer work in the hope I will live and receive NSP for at least 5 years post 2021 after which the increased Pension I receive by paying 5 years NICs will all be gravy.

If that is correct I think I would wait until 2020 and pay four years past NI at once as I would have a better idea re health wealth etc at that point rather than paying each year as it becomes possible to pay it?

SnowMan

afc80 wrote: »

My NI record says the following

Summary
32
years of full contributions

18
years to contribute before 2033

1
years when you did not contribute enough

My pension estimate is as follows

The earliest you can get your State Pension is 14 December 2033 when you'll be 67, your estimate is
£155.65 a week


Breakdown

Amount based on your latest National Insurance record (5 April 2015)
£126.44 a week
which is £549.79 a month, £6,597.46 a year

Amount you may get to if you continue to contribute
£155.65 a week
which is £676.80 a month, £8,121.59 a year

I have been in local govt for 29 years (contracted out) but hmrc says i have 32 years of full contributions (how is this so given i have contracted out)

And if the 32 full years is indeed correct does that mean i have only 3 years to go to get my pension?

Because you've been contracted-out throughout your starting amount will be based on the old rules rather than the new rules.

Your starting amount at April 2016 is likely to be £126.44pw, the 2015/2016 year isn't going to make any notable difference.

For each Qualifying Year after 5th April 2016 you can earn 1/35th of the full single tier amount, 4.45pw (= 155.65/35). So you will need 7 Qualifying Years post 5th April 2016 to get you up to the full single tier amount of £155.65pw since

126.44 + 4.45 (year 1) + 4.45 (year 2) + 4.45 (year 3) + 4.45 (year 4)+ 4.45 (year 5) + 4.45 (year 6) + 2.51 (year 7) = 155.65

The starting amount and £4.45 additions all increase in the same way as the full single tier amount of £155.65pw, currently the triple lock, so that calculation remains valid over time, i.e you need 7 years.

The 35 year thing only applies to people who come under the new state pension throughout, so those currently under about age 16. You need more than 35 years in total because you come under the transitional arrangements which take into account that you have been contracted-out of the additional state pension.


You have 32 years to date rather than 29 because of the automatic youth credits between age 16 and 18 I'm guessing. The online record should show you individual years to check this.

afc80

SnowMan wrote: »

Because you've been contracted-out throughout your starting amount will be based on the old rules rather than the new rules.

Your starting amount at April 2016 is likely to be £126.44pw, the 2015/2016 year isn't going to make any notable difference.

For each Qualifying Year after 5th April 2016 you can earn 1/35th of the full single tier amount, 4.45pw (= 155.65/35). So you will need 7 Qualifying Years post 5th April 2016 to get you up to the full single tier amount of £155.65pw since

126.44 + 4.45 (year 1) + 4.45 (year 2) + 4.45 (year 3) + 4.45 (year 4)+ 4.45 (year 5) + 4.45 (year 6) + 2.51 (year 7) = 155.65

The 35 year thing only applies to people who come under the new state pension throughout, so those currently under age 16. You need more than 35 years in total because you come under the transitional arrangements which take into account that you have been contracted-out of the additional state pension.


You have 32 years to date rather than 29 because of the automatic youth credits between age 16 and 18 I'm guessing. The online record should show you individual years to check this.

thanks for your swift and detailed reply.

I was in employment in the private sector for 3 years prior to entering local govt so the 32 years rings true.

SnowMan

Yorkshire_Pud wrote: »

I got my paper copy of my NI record and luckily I have 35 qualifying years so no benefit to buy any pre 2016 years.

That's correct.

I guess the reason my 35 years don't immediately qualify me for the full amount is because I had many Contracted Out years!?

That's also correct.

So on the face of it I need to work out if I want to pay the forthcoming NICs as I no longer work in the hope I will live and receive NSP for at least 5 years post 2021

You will have that choice to make. At the moment at £14.10pw (£733.20 pa), which seems to apply for 2016/2017 (?) it is great value to buy those years, unless you have a significantly reduced life expectancy. The unknown is what future class 3 rates will be.

Based on current rules you have 2 years after the end of each tax year to decide whether to buy the post April 2016 tax year (at the original rate that applied to that year), or 6 years at the then current rate.

So the key thing here is that you don't need to make any decisions until just before 6th April 2019

Sipowicz

Does anyone know why some people aren't getting the "what effects it" tab?

Sipowicz

Typo, "affects"

greenglide

Does anyone know why some people aren't getting the "what effects it" tab?

Because they are already getting more than the nSP maximum (£155.65) because they are calculated under the old rules?

People who have 35 years contributions or more and have already reached the £155.65 amount under the new rules and cannot get any higher?