New flat rate state pension April 2016 - Actual Amounts

Bootsox

Urgent changes to state pension statements (seems to be quite a bit of emphasis in spelling out the impact of "contracting out" on NSP):

12.We recommend that the following changes are made to state pension statements immediately:

• statements should be limited to one page in length;
• key messages should be highlighted in boxes to ensure they stand out clearly;
• statements should prioritise the current value of state pension built up, state pension age, the date that age will be reached, and how to build up additional benefits;
• state pension age should be highlighted in a prominent position, especially for those whose pension age has changed;
• means of getting further information, such as a full breakdown of NI history, details and calculations of NSP starting amounts, and calculations of deductions for period of contracting out should be clear and that information should be readily available;
• the term ‘Contracted Out Pension Equivalent’ should be replaced by ‘contracting out deduction’; and
• the contracting out deduction should be explained as such, making it clear that it is a reduced state pensions as a consequence of paying reduced NI contributions but may be compensated for by the individual’s private pension scheme.

http://www.publications.parliament.uk/pa/cm201516/cmselect/cmworpen/550/55003.htm#_idTextAnchor019

beach_hut

My husband retires Jan 2017 with 43 listed years of NI still looking into the supposed missing years as he has never been out of work since the age of 16, so should be 49 years in 2017. He was contracted out for 9 years, they are taking that off of the 35 qualifying years, therefore reducing his pension by a quarter. My question is why don't they count all qualifying years you've paid, then remove the contracted out?

greenglide

They do take into account all qualifying years. The new rules calculation will give the maximum amount (£155) and the contracted out deduction is taken off that.

However with only nine years contracted out I would have thought that the graduated pension, SERPS and S2P would have given a reasonable level of additional pension. In my case, even with 20 years contracted out, I will still get above above the maximum.

It does depend on the level of income when not contracted out. Was he low paid?

As to the qualifying years it is possible that the first couple of years don't count, was he an apprentice or similar?

Chickereeeee

greenglide wrote: »

They do take into account all qualifying years. The new rules calculation will give the maximum amount (£155) and the contracted out deduction is taken off that.

I am sure the poster meant ''...why don't they count all years in which they made full NI contribution.." e.g. 43 years minus 9 years contracted out = 34 years qualifying years for new pension.

C

greenglide

Because that is not what was ever intended.

You need 35 years NI contributions for the maximum under the new rules, the OP has that. At this point it is irrelevant whether those years are contracted out or not

However the contracted out deduction (whatever it is called now) is calculated and that is deducted from the starting amount under the new rules to take account of the reduced rates NI that has been paid. Note that this is only indirectly tied to the number of years they were contracted out, it is more based on the earnings during that time.

Remember the OP will get at least what they always would have and the have the benefits accrued from the contracted out scheme as well.

gadgetmind

Has anyone managed to get full calculations from them? Can you do it online?

bigfreddiel

Okay everyone, it's now seven weeks into the new state pension world, so some of you must have received your first payment.

Please tell us all what you got, what was forecast, and what day it was payed, I.e. Mon, Tues, Weds etc.

Cheers fj

bigfreddiel

I can only presume all the usual suspects are far to young to be in receipt of a state pension!

No problem, I will update this thread with actual vs. forecast in a few weeks time.

Cheers fj

bigphil30uk

I got an estimate in March 2015

NI 38 Years
Never Contracted Out
Estimated £214 per week

I worked for a multi national chemical company which surprisingly never contracted out its pension scheme. Lots of colleagues thought this suspicious and opted out individually. I stayed put mainly through inertia. Took early retirement/redundancy in 2008. Think I made a wise choice.

JohnB47

Not necessary bigphil. I was in a contracted out scheme for 25 years and the pension I'm receiving from that is vastly greater than the state pension I will be receiving at the end of this year (£137 per week estimated).