apologies for being thick! (NSP question)

aldershot

I've just logged into the pension forecast page and it give me a forecast of £178.23pw. How come?

I have 35 complete NI years (plus 2015/16 to come). I've always been in high paying employment but not sure when i have been contracted in and out but i assume it means i have additional voluntary contributions along the ways sometime? The site doesn't give any help on how it arrives at the number.

Any guidance welcome (and apologies for a bit of a first world problem style question!)

Goldiegirl

You don't pay AVCs into the state pension - so you must have been contracted into SERPS/S2P at some point

greenglide

You will have an amount, calculated under the old rules which is greater than the maximum of nSP under the new rules.

So this will be paid as £155.65 as nSP and the remainder as the "protected payment". The nSP amount is uprated by the triple lock (currently) while the protected payment is only uprated by the CPI.

You are a "winner" under nSP (assuming you reach SPa soon) as you will get £155.65 uprated by triple lock under nSP rather than just £119 under the old system.

A situation very similar to my own.

If you have been contracted out in a DB scheme and you have a GMP that will not be inflation proofed by the state pension as currently unless it is a public sector pension and your SPa date is before December 2018.

greenglide

so you must have been contracted into SERPS/S2P at some point

I hope you really mean "contracted out"?

xylophone

Are you saying that your foundation (starting) amount under the new system is stated to be £178.00 a week?

You have been both contracted in (and therefore built up SERPS/S2P )and contracted out.

A calculation will have been done to establish your starting amount which will have taken account of both your in and out years.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181229/single-tier-pension.pdf

"Individuals with a foundation amount which is more than the full level of the single-tier pension. These are likely to be older people with many qualifying years, and who have not spent significant periods contracted out of the additional State Pension. These people will receive the difference between their foundation amount and the and the full single-tier amount as an extra payment on top of the full single-tier weekly amount."

Goldiegirl

greenglide wrote: »

I hope you really mean "contracted out"?

No, I meant contracted in.

To be given a figure of £178.23, surely he had to be contracted in at some point?

AnotherJoe

I reported the same yesterday, mine is £196 now, £199 if i pay until retirement age.
My thought was it included a spurious COPE figure.
I was contracted out for a period but I dont know how long.

McKneff

I am a pensioner now and already have mine but I thought this new pension was supposed to be so much easier giving everyone a flat rate of £140 per week. It seems it has made it so much more confusing for people.

aldershot

xylophone wrote: »

Are you saying that your foundation (starting) amount under the new system is stated to be £178.00 a week?

It only give me one figure. I assume I have SERPs contributions in there somewhere. I thought I had been contracted out of SERPs and into private schemes for most of my early employment but maybe that was not always the case.

p00hsticks

McKneff wrote: »

I am a pensioner now and already have mine but I thought this new pension was supposed to be so much easier giving everyone a flat rate of £140 per week. It seems it has made it so much more confusing for people.

The new State Pension is very straightforward for those starting out in their working lives now - 35 years NI gets you the maximum pension (currently £155.65), anything between 10-35 years gets you the corresponding proportion of the maximum.

The complications come for those who have worked much of their lives under the old rules, as there are transitional rules in place to ensure that people don't lose out that have to take account all the previous complications like contracting in/out, SERPS, S2P etc...

kidmugsy

p00hsticks wrote: »

The new State Pension is very straightforward for those starting out in their working lives now ... The complications come for those who have worked much of their lives under the old rules, as there are transitional rules in place

Yes; the price of instant simplicity would have been too high.

I rather admire the coalition government for daring to have a go at it at all.