HMRC pension estimate

Nationwide8

So have just checked my pension estimate on the HMRC website..
It's as follows..
Pension in 2028

Forecast IS £155.66

But then underneath is says
... pension estimate based on NI contributions up to 2nd April 2015 =£125
..if contribute another 8yrs = £155

I have 37yrs full yrs NI contributions...

...

So is my pension estimate £155.65 or only that if I pay 8 more yrs contributions ??

molerat

Nationwide8 wrote: »

So have just checked my pension estimate on the HMRC website..
It's as follows..
Pension in 2028

Forecast IS £155.66

But then underneath is says
... pension estimate based on NI contributions up to 2nd April 2015 =£125
..if contribute another 8yrs = £155

I have 37yrs full yrs NI contributions...

...

So is my pension estimate £155.65 or only that if I pay 8 more yrs contributions ??

You may have 37 years of contributions but they do not all count towards SP. At April 2016 you have a starting figure based on the higher of either 30yrs old pension + additional pension or 35yrs new pension - contracted out deduction which equates to £125. With 37 years and a figure of £125 you will have been contracted out at some time so your figure is based on the old pre 2016 scheme. From April 2016 you can increase that amount to £155.65 at the rate of £4.25 per year, 8 years = £34. £125 + £34 = £159 - the 8th year will only get you about 90p worth of pension. You need to contribute another (7 or) 8 years to achieve the £155.65 figure. The estimate may be slightly out due to not including 2015-16 contributions, you need to wait for that to get the full picture.

Nationwide8

molerat wrote: »

You may have 37 years of contributions but they do not all count towards SP. At April 2016 you have a starting figure based on the higher of either 30yrs old pension + additional pension or 35yrs new pension - contracted out deduction which equates to £125. With 37 years and a figure of £125 you will have been contracted out at some time so your figure is based on the old pre 2016 scheme. From April 2016 you can increase that amount to £155.65 at the rate of £4.25 per year, 8 years = £34. £125 + £34 = £159 - the 8th year will only get you about 90p worth of pension. You need to contribute another (7 or) 8 years to achieve the £155.65 figure.

Thank you molerat,Sorry this is all new to me

...so I contribute £34 more only to get me to £155 per week pension ???

LXdaddy

Nationwide8 wrote: »

Thank you molerat,Sorry this is all new to me

...so I contribute £34 more only to get me to £155 per week pension ???

no
Each year of NI contribution after April 2016 will add £4.25 per year to your weekly pension. So you contribute NI for 8 years and will have a pension of £155.


It will cost quite a bit more than £34 of contributions.


It would be a wonderful return if contributing £34 paid back £34 per week for the rest of your life.

missile

Join the happy smile club.
My estimate is £152.35. Despite having 38 years qualifying contributions, I will receive less than someone who has never worked. I asked DWP to confirm if I will receive S2P benefit for significant contribution to SERPS I have made, but it appears not :-(

Nationwide8

LXdaddy wrote: »

no
Each year of NI contribution after April 2016 will add £4.25 per year to your weekly pension. So you contribute NI for 8 years and will have a pension of £155.


It will cost quite a bit more than £34 of contributions.


It would be a wonderful return if contributing £34 paid back £34 per week for the rest of your life.

Believe me I thought that couldn't be right !!

So I get it now ...

If I contribute ( am early retired now btw ) Class 3 voluntary NI contributions ( £733) for 8 yrs = £5865...gives me £30 extra a week for life pension ( £125 + £30 = £155 ).
By my reckoning if I lived past 71 ( retirement age 67 + 4 yrs ) I'd be in "profit" if not I'd have paid for nothing..

At the moment I'll be glad if I get to 67 and get back some of what I've contributed over 30 odd yrs although of course by then who knows what the state pension age will be ??

Nationwide8

missile wrote: »

Join the happy smile club.
My estimate is £152.35. Despite having 38 years qualifying contributions, I will receive less than someone who has never worked. I asked DWP to confirm if I will receive S2P benefit for significant contribution to SERPS I have made, but it appears not :-(

Have just started reading some thread on here and some are saying they never contributed ( by working ) or worked less yrs than myself but will get full state pension,maybe have read that wrong but can't get my head around all that..

Nationwide8

OK,another question..

I have a COPE amount on the HMRC pensions calculator..

Does that get paid separately from the £125 or that's in the £125

molerat

The COPE is what has been deducted from the "new" pension figure by paying reduced NI contributions. It is used in the higher of the two pensions calculation. You should be receiving this amount in the private or company pension you contracted out to. It is not a "real" amount, just a calculation, what you actually receive could be higher or lower.

MrsM has hardly paid any contributions through employment but will receive the full SP earned mostly through a combination of young person's credits, Home Responsibilities Protection credits, class 3 contributions and the new childcare credits

Nationwide8

molerat wrote: »

The COPE is what has been deducted from the "new" pension figure by paying reduced NI contributions. It is used in the higher of the two pensions calculation. You should be receiving this amount in the private or company pension you contracted out to. It is not a "real" amount, just a calculation, what you actually receive could be higher or lower.

So as I already receive a public service pension the COPE figure actually means nothing...

bigadaj

Nationwide8 wrote: »

So as I already receive a public service pension the COPE figure actually means nothing...

It's an indication of what they estimate you have gained by contracting out and paying reduced NI for many years.

The real gainers with the new state pension are those people who have been contracted out for many years, gained a pension from reduced NI contributions and now have the opportunity to get more pension from continued working and contribution.

Such people are significantly better off than their cohort who haven't contracted out, single rather than double bubble for them unfortunately.