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

agent69

bigfreddiel wrote: »

Yes it could be correct because you have some additional pension from SERPS and/or S2P when you were contracted in many years ago
.

Nice one, fj

Well there's a nice surprise (even if I do have to wait 6 years for it).

xylophone

Well there's a nice surprise (even if I do have to wait 6 years for it).

You mention that you have a deferred DB pension so it is almost certain that at some point you were contracted out - if so, RDA will have been applied when old and new rules were applied to calculate your starting amount.

However, it would appear that even after the RDA was applied, you had earned enough in SERPS/S2P over your working life to mean that the greater of the two calculations came out at more than £155.65 - this will give you a "protected payment" when you come to draw your state pension .

The PP will be index linked to CPI while (as far as is known at the moment), the balance will increase under "triple link" calculation, the higher of the growth in average earnings, the Consumer Price Index (CPI), or 2.5%.

grey_gym_sock

bigfreddiel wrote: »

Hmmmm....
Even using £151.88 doesn't make sense.

£151.88 x 52 = £7,897.76 per year
£7,897.76/12 = £658.14 per month

Originally Posted by Dhiammara View Post
£155.88 a week which is £660.41 a month, £7,924.88 a year

What is wrong with my maths, or aren't there 52 weeks in a year for the purposes of this calculation?

a non-leap year has 52 weeks and 1 day. a leap year has 52 weeks and 2 days.

work from there being 365.25 days in an average year:

£151.88 / 7 x 365.25 = £7,924.88

and £7,924.88 / 12 = £660.41

SnowMan

grey_gym_sock wrote: »

a non-leap year has 52 weeks and 1 day. a leap year has 52 weeks and 2 days.

work from there being 365.25 days in an average year:

£151.88 / 7 x 365.25 = £7,924.88

and £7,924.88 / 12 = £660.41

Yes that is almost exactly how they are doing it

So for those getting the full single tier pension the figures showing are £155.65 a week, £676.80 a month, £8,121.59 a year.

155.65/7 x 365.25 = £8,121.60 (one pence out)
8121.59/12 = £676.80

bigfreddiel

Thanks snowman and grey gym sock, I remember this now, working the examples backwards I could see there was a little bit more than 365 days in the year, but I couldn't see why. Now I can, must try not to forget this in future.

Cheers fj

agent69

xylophone wrote: »

You mention that you have a deferred DB pension so it is almost certain that at some point you were contracted out

I've been in several pension schemes (deferred DB and current DC) and have been contracted in and out more times than the hokey cokey.

Dhiammara

grey_gym_sock wrote: »

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).

Thank you. I only had one spell of being contracted out which was at the beginning of my career. I'll keep an eye on the site to see what the figures are when 2015-16 are included.

Just so I'm clear - it seems I will hit £155.65 before 35 years NI contributions in this case. If having taken early retirement before this point am I right in assuming there will be no benefit in making up my record to 35 years as I had previously thought 35 years was the minimum to qualify?

SnowMan

Dhiammara wrote: »

Thank you. I only had one spell of being contracted out which was at the beginning of my career. I'll keep an eye on the site to see what the figures are when 2015-16 are included.

Just so I'm clear - it seems I will hit £155.65 before 35 years NI contributions in this case. If having taken early retirement before this point am I right in assuming there will be no benefit in making up my record to 35 years as I had previously thought 35 years was the minimum to qualify?

That's correct.

The 35 years to get the full single tier pension only applies to those who come completely under the new state pension.

For people like yourself, who come under the transitional arrangements (because you have a pre April 2016 contribution record), the number of qualifying years to get you to £155.65pw will vary on an individualised basis.

Assuming you get the 2015/2016 year and the 2016/2017 year, that will be enough to get you to £155.65pw, so you will have needed 30 qualifying years in your case.

Dhiammara

grey_gym_sock wrote: »

i've changed £155.88 to £151.88 (in bold), where i think that's what you meant (based on your other figures) ...

similarly to you, your husband seems to have more on the OLD calculation than the NEW.

OLD
basic 26/30 x £119.30 = £103.39
plus
additional (inferred to be) £7.16
makes £110.55

NEW
26/35 * £155.65 = £115.63
minus
COPE £50-ish
makes about £65

so OLD is higher.

if he has no NI credits for the last few years, then paying voluntary contributions for up to 4 of the years before 5 april 2016 can increase that amount. however, each of those extras years only adds about £119.30 / 30 = £3.98; but each year after 5 april 2016 which you pay for adds about £155.65 / 35 = £4.45. so the latter years are a bit more valuable. however, i think he can only buy about 8 or 9 of the latter years (the last tax year you can buy is the 1 before the tax year in which you reach state pension age), so may need to buy some of the earlier years, too.

Thank you again. You are correct - I made a typo in my original post and the correct figure should have been £151.88. His COPE estimate figure is actually £57.42.

He has previously requested a NI record and can buy 8 of the earlier years (it'll be 9 by now) as long as they are purchased before 5 April 2019. Obviously we can see there is no benefit to purchasing more than 4 of the older years. Two of the older years have partial contribution records so will only cost £185.50 and £79.50 to complete those seems sensible.

What I can't understand is where the figure of £151.88 is coming from? Add the year ending 2015-16 to the old calculation would give £110.55 + £3.98 = £114.53. By then adding the max number of years contributions post-April 2016 which is 8 years, that would add £35.58 (£155.65/35*8) giving £150.11 not £151.88.

In any case, to ensure his full nSP, am I right in saying it will be necessary to complete his 30 years pre-2016 (4 years voluntary), then add another 7 years post-2016 voluntary contributions.

My main surprise comes from finding that more than 35 years contributions can count, similar to my surprise that my own is maxing out with only 30 years. So much for the flat rate pension being simpler - it seemed much more straightforward before...

I think we're most likely to pay for the older years and then play the waiting game for a bit in case the goal posts change yet again.

SnowMan

Dhiammara wrote: »

What I can't understand is where the figure of £151.88 is coming from? Add the year ending 2015-16 to the old calculation would give £110.55 + £3.98 = £114.53. By then adding the max number of years contributions post-April 2016 which is 8 years, that would add £35.58 (£155.65/35*8) giving £150.11 not £151.88.

The difference relates to a blanket assumption that he will earn about £1.77pw of additional state pension for 2015/2016.

Have a look at molerat's post 320 and my reply, it is exactly the same issue.

In reality he won't earn any additional pension if he hasn't worked or got credits for 2015/2016

In any case, to ensure his full nSP, am I right in saying it will be necessary to complete his 30 years pre-2016 (4 years voluntary), then add another 7 years post-2016 voluntary contributions.

If he buys 4 pre April 2016 years that will take his starting amount up to £126.46 (119.30 + 7.16) and so yes 7 post April 2016 years will take him up to £155.65pw, since

126.46 + 4.45 (year 1) + 4.45 + 4.45 + 4.45 + 4.45 +4.45 + 2.49 (year 7) = 155.65

He could also buy 3 pre April 2016 years and 8 post April 2016 years to get up to £155.65pw.

As he has until 5th April 2019 to decide then he should wait for the time being before buying any years.