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

xylophone

A calculation has been done for what you would receive under old rules and under new rules to give your "Foundation Amount"

Both calculations take account of the deduction of a "Rebate Derived Amount" - almost certainly your old calculation is the higher of the two.

If your FA is lower than the full NSP, then you can increase it up to the full amount through NI contributions or credits up to your SPA.

See (although figures out of date) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

goodValue

Not sure why there is a difference. I have definitely only got two years. I would not have expected to get any but it is certainly two not three.


I originally was given 3 credits, but a statement last year showed only 2.
After contacting the National Insurance Contribution Office, they reinstated it to 3.

cjking

I have come to the conclusion that the most likely reason why my starting amount is about £20 higher than I expected is that I've received S2P credits for about 14 years where my earnings were just below the threshold for paying NI. Does that sound plausible?

greenglide

If you were earning between the lower earnings limit and the lower earnings threshold £112 and £155 then you build S2P entitlement without actually paying any money.

Technically it isn't credits, just the way NI and S2P works.

fifeken

saver861 wrote: »

Yes - you will have 35 years to get the max new pension of £155.

I've just looked again and the figure I've been given is actually £156.82. I've seen the £155.65 used frequently as the maximum, so why am I seeing a higher figure? It doesn't seem to be anything to do with COPE as that's listed seperately.

bigfreddiel

fifeken wrote: »

I've just looked again and the figure I've been given is actually £156.82. I've seen the £155.65 used frequently as the maximum, so why am I seeing a higher figure? It doesn't seem to be anything to do with COPE as that's listed seperately.

Ignore COPE, it's just FYI!

The reason your figure is higher than the maximum nSP is because your additional pension plus the oSP aid higher than the max nSP.

Additional pension is from SERPS or S2P.

I guess you were never contracted out.

Cheers fj

bigadaj

bigfreddiel wrote: »

Ignore COPE, it's just FYI!

The reason your figure is higher than the maximum nSP is because your additional pension plus the oSP aid higher than the max nSP.

Additional pension is from SERPS or S2P.

I guess you were never contracted out.

Cheers fj

You're probably correct for the first part of your post, but why would there be a cope figure quoted if they were never contracted out?

It sounds as though they were contracted out for some time and in for other periods, I've seen figures quoted of well over £200 a week for people who were never contracted out and have a large amount of Serps and s2p.

Dhiammara

Slightly confused with the information being presented on the government website. In my case, age 48, the 2015-16 year is currently still not showing, but my breakdown is:

Estimate based on your National Insurance record up to 5 April 2015
£148.38 a week
Estimate if you contribute another 2 years before 2034
£155.65 a week

The NI record shows 28 full years (no gaps other than 4 years at uni) and there is a COPE showing of 3.92.

Question: how can my state pension estimate be £155.65 a week with a requirement for only 2 further years contributions (in fact only 1 further as 2015-16 will be complete)? This appears incorrect as will only be 30 years in total and not the 35 required by the new scheme.

I'm currently considering retirement options so was expecting to be making voluntary contributions to make up the difference.

Dhiammara

Separate post re: my husband's state pension. He is 57 and took early retirement some years ago so 2004-5 year was his last full year of NI contributions. We always anticipated making voluntary contributions to complete his record but again, the information on the site isn't clear as to what contributions need to be made to ensure he receives the full state pension. Any advice would be appreciated.

Based on 26 years of contributions his record

Amount based on your latest National Insurance record (5 April 2015)
£110.55 a week which is £480.70 a month, £5768.34 a year
Amount you may get to if you contribute
£155.88 a week which is £660.41 a month, £7,924.88 a year

He has a COPE showing on a separate page, it was just over £50 but I forget the exact figure.

Am I right in assuming that we need to pay for 4 years voluntary contributions prior to the end of the 2015-16 tax year taking him to 30 years pre-nSP contributions, and then make contributions for a further 5 years post nSP to ensure his full nSP or am I totally misunderstanding? Also will COPE mean he can't reach full nSP in any case? The COPE page was adding the £151.88 to the COPE amount to show an amount of just over £202 in total.

grey_gym_sock

Dhiammara wrote: »

Slightly confused with the information being presented on the government website. In my case, age 48, the 2015-16 year is currently still not showing, but my breakdown is:

Estimate based on your National Insurance record up to 5 April 2015
£148.38 a week
Estimate if you contribute another 2 years before 2034
£155.65 a week

The NI record shows 28 full years (no gaps other than 4 years at uni) and there is a COPE showing of 3.92.

Question: how can my state pension estimate be £155.65 a week with a requirement for only 2 further years contributions (in fact only 1 further as 2015-16 will be complete)? This appears incorrect as will only be 30 years in total and not the 35 required by the new scheme.

I'm currently considering retirement options so was expecting to be making voluntary contributions to make up the difference.

you entitlement up to 5 april 2016 will be calculated as the higher of the old & new methods:

OLD METHOD
basic state pension of 28/30 x £119.30 = £111.35
plus
additional state pension (from any years when you were employed & contracted in); this must be £37.03,
because that makes the total £111.35 + £37.03 = £148.38

NEW METHOD
flat rate state pension of 28/35 x £155.65 = £124.52
minus
COPE (which is related to years when you were employed and contracted out) of £3.92,
which makes £124.52 - £3.92 = £120.60

in your case, the old method is the higher figure.

£148.38 is only up to 5 april 2015, so if you have another year in 2015-16, the basic state pension part will use 29/30, and there might also be a fraction more additional state pension.

after 5 april 2016, there are no more OLD/NEW calculations, but whatever you then have, assuming it is less than £155.65, is increased by 1/35 of £155.65 for each extra year (including voluntary contributions).