New State Pension Guide

lean&mean

I agree wholeheartedly with your points, except for one. As someone who was contracted out while investing in a personal pension with Equitable Life (another story!) I could in theory be better off. But the contracted out portion was kept in a separate pot called 'protected rights'. I got a pension statement from the Govt, showing my contracted out period meant deductions of approx £30 per week. How much would my protected rights fund buy me? About £84 per year currently!

What you point out is something I've only just learnt about: the fact that for each year I continue to contribute full NI after 2016 I gain another £4.45 per week on my pension payments. So after about 8 years I'll make up the shortfall (though by that time the pension will have gone up further so I'll need some more years - perhaps 10 - to make up the difference).

The MSE article is also misleading. Making additional contributions will not affect the deductions made for contracting out. This can only be filled in by continuing to pay NI after 2016. Please correct me if I'm wrong. I'd be delighted to hear it!

The information about this is really hard to find but I did eventually find something on a government website to reassure me. https://www.gov.uk/new-state-pension/how-its-calculated But I wish they'd put this information in their pension statements.

This is fine for someone in their mid-fifties but if I'd been mid-sixties I'd be seething. The contracted out deductions are completely unfair.

lean&mean

Is it just me or has anyone had a completely different quote when comparing the quick online quote and getting a written one?

My online quote showed me as having 38 years full NI contributions so I'd have the full SP payout of £155. But my written quote came through saying as I'd been contracted out after deductions I'd be getting £120pw.

If all you've done is get an online quote, beware! You might have a nasty shock in a few years time when you retire.

molerat

Unlikely the on line forecast said you will get the full £155, it normally states you could get the full amount with x further contributions. You will not have to contribute extra years above that already stated as your 2016 starting amount and the value of that £4.45 increases each year with the triple lock to match the new maximum pension.

gerrysw11

I have thirty five qualifying years (I have a statement) but some are contracted out. It seems as if I will get less than the new maximum.

The statement suggests I can top-up a short fall for 2010-11 until April 2019

What I am not clear about, is whether that year will add to the pension

Does anyone know or know how to find out, please?

molerat

If you have 35 pre 2016 years purchasing more pre 2016 years will add nothing. Post 2016 years will add value at £4.45 per week for each year purchased.

gerrysw11

thank you for your clear reply

p00hsticks

lean&mean wrote: »

What you point out is something I've only just learnt about: the fact that for each year I continue to contribute full NI after 2016 I gain another £4.45 per week on my pension payments. So after about 8 years I'll make up the shortfall (though by that time the pension will have gone up further so I'll need some more years - perhaps 10 - to make up the difference).

I don't think you'll need any additional years due to the maximum rising. What you are actually purchasing for each year is 1/35th of the maximum pension - £4.45 is what that currently equates to, but the final value will only be determined once you reach State Pension age and so will be higher if the £155.65 maximum has increased.

lean&mean

molerat wrote: »

Unlikely the on line forecast said you will get the full £155, it normally states you could get the full amount with x further contributions. You will not have to contribute extra years above that already stated as your 2016 starting amount and the value of that £4.45 increases each year with the triple lock to match the new maximum pension.

Definitely said it will be full payment. Hopefully I've managed to show image below.

p00hsticks

lean&mean wrote: »

Definitely said it will be full payment. Hopefully I've managed to show image below.

http://d.pr/i/iA1T

I suggest you double check - I've just looked at mine, and it looks exactly the same as that at the top, but if I then scroll down it says;

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2016
£123.82 aeek

Forecast if you contribute another 8 years before 5 April 2025
£155.65 a week

xylophone

I suggest you double check

Indeed - see post 11 here

https://forums.moneysavingexpert.com/discussion/5619176

What is your

Estimate based on your National Insurance record up to 5 April 2016