On-line State Pension Forecast confusing

tigerspill

Hi,
I have just logged onto my HMRC account and looked at the State Pension forecast.

It seems to show what I have pasted below.

Does this mean that my Basic State Pension with my current contributing years so far is £136.55. I thought this was a maximum of £119.10.
I was contracted out to 2009, and in since then. So I guess when they compared the old with the new, the old was much higher because of the contracting out.
If I click through there is a COPE amount which I think is the contracted in S2P bit that should be part of my work scheme.

What I actually am trying to find out since the changes last month - What is my current SP that I would be getting should I retire now (early) - I know I won't get it for many years until age 67. I has assumes this was the £119ish. (assuming no further legislation changes).

Breakdown

Estimate based on your National Insurance record up to 5 April 2015
£136.55 a week
Estimate if you contribute another 5 years before 2032
£155.65 a week
£155.65 is the most you can get

When you reach £155.65, you still need to pay National Insurance until 2033 as it funds other state benefits and the NHS.

View your National Insurance record
How contracting out affects your pension income

Like most people, you were contracted out of part of the State Pension.

More about how contracting out has affected your pension income.

Your State Pension estimate is provided for your information only and the service does not offer financial advice. When planning for your retirement, you should seek professional advice.





Your State Pension forecast £155.65
Your COPE estimate £57.74
COPE added to your State Pension forecast £213.39

greenglide

As it says (poorly!) is that your contributions up to last year get you £136.55. If you make further contributions you can reach the maximum of £155.65.

Ignore the COPE, that is just a bit of confusion thrown in and is meant to be the amount that your pension from contracting out will get you as a minimum.

The reason for this being above the old basic pension rate of £119 is because you have earned Additional Pension from the old scheme (GRAD, SERPS and S2P )

robin61

This is worth staying on top of. My wife was getting NI credits until our daughter was 12 at the end of January 2016. By paying just over £100 to top up 2015/16 I paid enough to get her another full year of NI contributions and that takes her to within a couple of quid a week of the maximum.
Nobody tells you about this you need to take the initiative.

tigerspill

Thanks Folks
So since 2009 I have been contracted back in to what I think is called S2P (BTPS). Is this where the difference between the 119 and the 136 would be? How would I find out for sure?

Robin61 - not sure what you mean when you say "staying on top of this".

Also, I don't intend to work another five years to get the full SP. I have heard things about buying years. Is this something I can do? Is it worth it?

greenglide

What you can do is to pay voluntary NI contributions - Class 3.

The amount you have accrued so far above £119 can only be from Graduated pension (from the sixties and early 70s) SERPS and S2P. It was possible to accrue a small amount of SERPS even if contracted out before 1998 or so.

Does it really matter where it came from? If you really want to find out the first thing to do is to find out details of you NI record. Go to https://www.gov.uk/check-national-insurance-record

robin61

tigerspill wrote: »

Robin61 - not sure what you mean when you say "staying on top of this".

Contracted in since 2009. Sounds familiar I bet you work for BT.

I mean that it is worthwhile people making sure they know how many NI years they have. Don' t assume just because you have 35 you will get the full pension because if you were contracted out you won' t. You will need to have more years. You can work out how many extra you will need to have to get the full pension and if you want to retire before that you have the option of buying extra NI years. Which is a good investment if you don' t qualify for the maximum.

tigerspill

robin61 wrote: »

Contracted in since 2009. Sounds familiar I bet you work for BT.

I mean that it is worthwhile people making sure they know how many NI years they have. Don' t assume just because you have 35 you will get the full pension because if you were contracted out you won' t. You will need to have more years. You can work out how many extra you will need to have to get the full pension and if you want to retire before that you have the option of buying extra NI years. Which is a good investment if you don' t qualify for the maximum.

Yep - BT.

Apologies for more questions.

I thought that after April 2016 that the contracted out part was irrelevant as the higher of the old and new calculations is what mattered. I have over 30 years of contributions so far. And that the difference between the £119 SP today and the £155 ned flat amount could be made up by working the additional 5 years - giving around £7 per week extra per year worked. Have I got this wrong?

How do I go about buying additional years to get the max 35?

Thanks again.

It is all so confusing.

molerat

The 35 years is irrelevant post 2016 unless you have missing pre 2016 years and have a small or no COPE. The important thing going forward is the starting amount and how many years you need to buy to get to that maximum figure. Each year earned or purchased is worth £4.45 so yes you need to work or purchase 5 more post 2016 years. They can be purchased up to 2 years after the end of the relevant year at the price they are for that year and up to 6 years after at the current price for the year they are purchased in. They cannot be purchased in advance. https://www.gov.uk/pay-voluntary-class-3-national-insurance/overview

robin61

tigerspill wrote: »

Yep - BT.

Apologies for more questions.

I thought that after April 2016 that the contracted out part was irrelevant as the higher of the old and new calculations is what mattered. I have over 30 years of contributions so far. And that the difference between the £119 SP today and the £155 ned flat amount could be made up by working the additional 5 years - giving around £7 per week extra per year worked. Have I got this wrong?

How do I go about buying additional years to get the max 35?

Thanks again.

It is all so confusing.

You don't need to do anything until you leave BT. Then you will be able to get a new statement which will show you how close you are to the maximum.
In the meantime while you are still working for BT you are still gaining extra NI years.
My wife has finished work now. She was contracted out so doesn't currently qualify for the maximum. I was quoted £733.20 for each extra NI year which gets you an extra £4.45 per week.

tigerspill

robin61 wrote: »

You don't need to do anything until you leave BT. Then you will be able to get a new statement which will show you how close you are to the maximum.
In the meantime while you are still working for BT you are still gaining extra NI years.
My wife has finished work now. She was contracted out so doesn't currently qualify for the maximum. I was quoted £733.20 for each extra NI year which gets you an extra £4.45 per week.

Thanks.

That sounds like pretty good value.