Help me understand my State Pension Award Notice

JohnB47

Hi.

Edit:

Sorry, sorry. I made a mistake in my original post. I've now removed the second question I had - I've enclosed it with *** symbols and greyed it out in case anyone has already read it and is replying now. My first question remains though. Thanks.

I applied for my SP in October and I received my Award Notice today, for my pension starting on my 65th birthday on 28/12/16.

I've just spoken to the DWP to clarify the figures and when I will be paid. This has helped I still can't get the final figures to fully line up with my latest on-line forecast, obtained in August 2016.

I'm pretty sure everything is in order but can anyone help untangle this for me? My specific questions are at the end.

First, the figures from my Forecast: £144.58 per week, £628.66 per month, £7543.98 per year. All figures I quote are before tax.

Then my Award notices says:

"You are entitled to a State Pension of £144.58 per week, payable from 28th December 2016. State Pension is always paid in arrears. Your first payment is for the total sum of £578.32 for the period 28th December 2016 to 24th January 2017, both dates included. This may include any arrears that we owe you. This will be paid on 24th January 2017.

Your second payment is for the total sum of £578.32. This will be paid on 21st February 2017."

The DWP lady clarified that I am being paid four weekly, always on a Tuesday and that I will receive 13 payments per year.

Now for the questions. My forecast quoted £144.58 per week, or £7543.98 per year. But 13 payments of £578.32 = £7518.16
Why the difference? OK, it's only a few quid but I like to see figures line up. (For that matter, I couldn't understand how they got my Forecast figures of £144.58 a week to mean £628.66 per month, or £7543.98 per year - perhaps my using figures of 52 weeks per year and 365 days per year isn't correct).

*** Then I thought, 13 four weekly payments per year - is that possible? So I looked at a calendar and starting on 24th Jan 2017 as the first payment and counting every four weeks, gives just 12 payments in 2017. By my reckoning, between my SP date of 28th Dec 2016 to 28th Dec 2017 I will have received 12 payments of £578.32, coming to £6939.84 well short of £7543.98 (the forecast yearly figure). Well, a month short really.

Then I looked at 2017. In that year I can receive 13 four weekly payments, giving me 13 X £578.32 = £7518.16

So it seems that I'll receive 12 payments in my first year, 13 in my second and who knows what in my third etc. Also, it seems that the payment date drifts around from month to month, always on a Tuesday but never the same one as previously. ***

Can anyone help me understand this? Perhaps I've made a simple mistake.

Thanks.

McKneff

Maybe it's something to do with when your first birthday of retirement is. They only pay full weeks so you may not be paid for the fist day or so . . I get paid 13 times a year.

anmarj

You need to get out more! Your enitlement will increase in April every year, so working out, January to January what your yearly figure is incorrect. If you worked out the weeks from April to April, you will get the 13 payments. Monthly payments are worked out on 12 payments, which means it will be out against four weekly payments. At some point in the year, one month wil have two payments, that will vary from year to year when this happens. Also some years (leap years) kick in 53 weeks just to confuse the matter. So if you times 13 by 4 you get 52 = 1 year.

anmarj

McKneff wrote: »

Maybe it's something to do with when your first birthday of retirement is. They only pay full weeks so you may not be paid for the fist day or so . . I get paid 13 times a year.

New state pensions do get part payments now in alll cases

JohnB47

anmarj wrote: »

You need to get out more! Your enitlement will increase in April every year, so working out, January to January what your yearly figure is incorrect. If you worked out the weeks from April to April, you will get the 13 payments. Monthly payments are worked out on 12 payments, which means it will be out against four weekly payments. At some point in the year, one month wil have two payments, that will vary from year to year when this happens. Also some years (leap years) kick in 53 weeks just to confuse the matter. So if you times 13 by 4 you get 52 = 1 year.

Yes, I should. It's just that I like checking figures and seeing that they line up. A bit weird I know. Anyway, I don't think you've explained my first question, which was:

"My forecast quoted £144.58 per week, or £7543.98 per year. But 13 payments of £578.32 = £7518.16 Why the difference? OK, it's only a few quid but I like to see figures line up. (For that matter, I couldn't understand how they got my Forecast figures of £144.58 a week to mean £628.66 per month, or £7543.98 per year - perhaps my using figures of 52 weeks per year and 365 days per year isn't correct)."

Any thoughts on that? My Award Notice doesn't mention any part payment, something I was actually expecting based on a discussion in another thread. (Small payment on the first Tuesday after my SP date, then full payments 4 weekly thereafter). See posts 43 and 44 on this thread:

https://forums.moneysavingexpert.com/discussion/5491874


Then I must go out.

Cheers.

Silvertabby

13 payments is indeed 52 weeks - but there are 52.2 weeks in a year, so your 13 payments of £7518.16 aren't quite a full year.

JohnB47

Silvertabby wrote: »

13 payments is indeed 52 weeks - but there are 52.2 weeks in a year, so your 13 payments of £7518.16 aren't quite a full year.

Ah yes, I see what you mean. Actually DWP seem to be using 52.1785 as the number of weeks in a year (£7518.16 divided by £144.58 rounded to four decimal places).

Sorry I'm getting picky now - just curious as to how they calculate this stuff.

Anyway, thanks but any idea why I didn't get an initial part payment?

anmarj

in your case you don't get part payment. Your birthday falls at the start of your benefit week. Your benefit week runs from Wednesday to the Tuesday, with your payment being for the Tuesday to the previous Wednesday as you are paid in arrears. If your birthday had fallen on any other day of the week, then you would get a part payment

greenglide

Your birthday must be the day after the payday so you get the full week without any odd days. Under the old rules any odd days would have not been paid unless your had been in receipt of certain other benefits. In your case there are no "odd days".

Your birthday must also fall in such a way that the payday on which you actually get paid would have been the week before your birthday so you get a full four weeks in the first payment.

Both cases happened to me as well. No odd days, full four weeks in the first payment.

Note that State Pension is a weekly benefit and DWP always deal in weeks or multiple weeks except for the odd days at the start or end of entitlement. HMRC (they own the site that does the pension forecasts) put in the mothly and annual amounts but they can never be correct as the pension system doesnt deal in months or years - it deals in weeks, fortnights, four weeks, 13 weeks and 52 weeks so payments (apart from the special case of annual payments "drift" around the calendar. Note that annual payments (used for paying small amounts overseas) are always paid on the same dates, related to the christmas bonus week - normally getting 52 weeks and sometimes 53 weeks.

You did ask:-)

JohnB47

greenglide wrote: »

Your birthday must be the day after the payday so you get the full week without any odd days. Under the old rules any odd days would have not been paid unless your had been in receipt of certain other benefits. In your case there are no "odd days".

Your birthday must also fall in such a way that the payday on which you actually get paid would have been the week before your birthday so you get a full four weeks in the first payment.

Both cases happened to me as well. No odd days, full four weeks in the first payment.

Note that State Pension is a weekly benefit and DWP always deal in weeks or multiple weeks except for the odd days at the start or end of entitlement. HMRC (they own the site that does the pension forecasts) put in the mothly and annual amounts but they can never be correct as the pension system doesnt deal in months or years - it deals in weeks, fortnights, four weeks, 13 weeks and 52 weeks so payments (apart from the special case of annual payments "drift" around the calendar. Note that annual payments (used for paying small amounts overseas) are always paid on the same dates, related to the christmas bonus week - normally getting 52 weeks and sometimes 53 weeks.

You did ask:-)

Yes, I did ask and thanks for the fulsome reply. I wasn't initially sure what you meant when you said "Your birthday must be the day after the payday" but I do understand, when I read anmarj's reply as well.

So OK, I think I've got it now. Pretty complicated isn't it? I'm sure many people just accept what they're given without going into it in this detail. I'm just naturally curious (and a little suspicious).

Thanks again for all replies.

Triumph13

JohnB47 wrote: »

Actually DWP seem to be using 52.1785 as the number of weeks in a year (£7518.16 divided by £144.58 rounded to four decimal places).

Sorry I'm getting picky now - just curious as to how they calculate this stuff.

Well if you really want to be precise, the sum is £144.58 x 365.25/52 = £7,543.98. 52 weeks is only 364 days whereas your 'average' year is 365.25 days long once you factor in leap years. (and before anyone gets really pedantic I think we can probably ignore the possibility of you still drawing your pension in the year 2100, so we don't need to allow for xx00 years not being leap years!)