Contracted out calculation?

soft_toy

My current forecast is £139.24.
The NI record includes 2015/16.

I can see you have noted from my earlier posts that my forecast was originally higher... but after I paid up a year when I had not contributed enough (there was one week missing) the figure dropped from £142.19 to its new level of £139.24. No idea why?

SnowMan

soft_toy wrote: »

My current forecast is £139.24.
The NI record includes 2015/16.

I can see you have noted from my earlier posts that my forecast was originally higher... but after I paid up a year when I had not contributed enough (there was one week missing) the figure dropped from £142.19 to its new level of £139.24. No idea why?

Two things seem to have been going on:

Firstly there is a discrepancy on whether your state pension earned to 5th April 2015 was £139.24pw or £140.42pw.

Then the DWP have assumed that you would earn some additional state pension for 2015/2016 (about £1.77pw), a blanket assumption they were using for everyone. In practice it appears you didn't earn that £1.77pw.

soft_toy

Thanks SnowMan and xylophone.
the affected years are 1999/00 to 2002/03 It is actually 4 years that should have been recorded as complete that are missing from my record.

If I pursue this with HMRC I would be VERY disappointed if it had the same effect as the last time I increased my recorded years of NICs. Is this a possibility?

I also think the £1.77 that has been removed from my estimate is an error as well because I thought I was eligible for automatic pension credits for men born before 1953

SnowMan

soft_toy wrote: »

Thanks SnowMan and xylophone.
the affected years are 1999/00 to 2002/03 It is actually 4 years that should have been recorded as complete that are missing from my record

So there is a possibility that there may be some missing additional state pension from 2002/2003.

If I pursue this with HMRC I would be VERY disappointed if it had the same effect as the last time I increased my recorded years of NICs. Is this a possibility?

Anything's a possibility. But balance of probabilities is that if they make a change it will be to increase your state pension not reduce it.

I also think the £1.77 that has been removed from my estimate is an error as well because I thought I was eligible for automatic pension credits for men born before 1953

I don't think all credits count towards additional state pension (as opposed to just basic state pension) just certain types such as carers and disabled credits.

The best information I can find is this old booklet (see pages 32 - 33)

https://www.gov.uk/government/publications/state-pensions-leaflet

see also

https://www.gov.uk/additional-state-pension/eligibility

xylophone

https://www.gov.uk/national-insurance-credits/eligibility

Men approaching 65
Your situation
You’re between the current women’s State Pension age and 65, live in the UK at least 183 days a year and you’re in one of these situations: you don’t work, you don’t earn enough to make a qualifying year, or you’re self-employed with a small earnings exception

You get Class 1 credits automatically

https://www.gov.uk/national-insurance/what-national-insurance-is-for

The above indicates that Class 1 counts towards ASP.

OP, are you currently not working?

Are you already in receipt of a DB pension from your contracted out years?

Or will you be in receipt of it when you reach 65?

soft_toy

Thanks xylophone
No I am not working and yes I am in receipt of my workplace DB pension

SnowMan

xylophone wrote: »

https://www.gov.uk/national-insurance-credits/eligibility

Men approaching 65
Your situation
You’re between the current women’s State Pension age and 65, live in the UK at least 183 days a year and you’re in one of these situations: you don’t work, you don’t earn enough to make a qualifying year, or you’re self-employed with a small earnings exception

You get Class 1 credits automatically

https://www.gov.uk/national-insurance/what-national-insurance-is-for

The above indicates that Class 1 counts towards ASP.

I don't claim to have a definitive answer, but I think it indicates that incorrectly.

The explanatory note from when the legislation was enacted is here (see paragraphs 349 -350)

http://www.publications.parliament.uk/pa/ld199900/ldbills/054/en/00054x-e.htm

The credits for S2P were for carers and some disabled people only. In practice it worked by those categories being notionally assumed to have earnings sufficient to get the lowest level of S2P. I don't think this general principle has changed.

soft_toy

Thanks SnowMan
So when my pension estimate said £139.24 rising to £141.01 if i continued to contribute it wasn't referring to the class 1 credits ?

The reference to continuing to contribute is no longer shown on my estimate.

SnowMan

soft_toy wrote: »

Thanks SnowMan
So when my pension estimate said £139.24 rising to £141.01 if i continued to contribute it wasn't referring to the class 1 credits ?

The reference to continuing to contribute is no longer shown on my estimate.

It was a blanket assumption not really related to individual circumstances.

The same blanket £1.77pw assumption was made, for example, where individuals had retired some years ago, weren't getting credits and hadn't got any recent qualifying years.

The underlying assumption was that someone would accrue (just) the flat rate of S2P for 2015/2016 (e.g. through earning between about £5,824 and £15,300 or getting carer credits)

Until the year had ended and contributions/credits processed by HMRC/DWP, they couldn't tell if the assumption was right or wrong; just because someone had previously retired early they could still have come out of retirement and worked in 2015/2016.

xylophone

I don't claim to have a definitive answer,

Similarly, neither do I....I remember the change in legislation that enabled carers etc to build some ASP.

And it was the case that men retiring at 60 with our DB scheme ( before change to 30 year requirement for full old rules SP), were advised that this would not have a negative effect on their state pension.