SERPS Contracted -Out & State Pension

Dark_Sunday

I contracted out of SERPS almost 30 years ago & as a result expected a lower state pension at retirement time. However on the GOV.UK website it shows that if I make another 6 years of N.I. contributions I'll qualify for the max. state pension, £155.65.

Would be obliged if anyone more knowledgeable than myself could comment on this ?

dunstonh

How many years do you have where you were not contracted out?

Do those 6 years and what you already have in non-contracted out years equal or more than 35?

zagfles

Dark_Sunday wrote: »

I contracted out of SERPS almost 30 years ago & as a result expected a lower state pension at retirement time. However on the GOV.UK website it shows that if I make another 6 years of N.I. contributions I'll qualify for the max. state pension, £155.65.

Would be obliged if anyone more knowledgeable than myself could comment on this ?

Sounds quite normal.

zagfles

dunstonh wrote: »

How many years do you have where you were not contracted out?

Do those 6 years and what you already have in non-contracted out years equal or more than 35?

What relevance does that have to anything?

Dark_Sunday

dunstonh wrote: »

How many years do you have where you were not contracted out?

I think 8 years before contracting out, & then the other years from when it stopped. Don't know exactly when that was TBH, but most defo not anywhere near 35 years. Im not that old haha

molerat

You will have a starting amount at Apr 16 which is the higher of either the new 35 yr or old 30 yr pension system calculations. You can make that figure up to the new £155.65 with post Apr 16 NI accruals. How many years total do you have up to Apr 16 ?

zagfles

Dark_Sunday wrote: »

I think 8 years before contracting out, & then the other years from when it stopped. Don't know exactly when that was TBH, but most defo not anywhere near 35 years. Im not that old haha

There's nothing special about getting 35 years in your situation anyway where you have contracted out service. You can have 35 years contracted in and some years contracted out and still not get a full state pension.

There've been some very long threads on here explaining how it all works, but if you're just after some reassurance, your situation sounds perfectly normal - mostly contracted out usually means you need a few more years to get a full single tier pension.

Dark_Sunday

molerat wrote: »

You will have a starting amount at Apr 16 which is the higher of either the new 35 yr or old 30 yr pension system calculations. You can make that figure up to the new £155.65 with post Apr 16 NI accruals. How many years total do you have up to Apr 16 ?

Been working 36+ years so been paying NI since then. Contracted-out from 1989 to when it stopped a few years ago. Can't remember exactly when that was.

molerat

The good news is that although you reached the maximum you could have under the old system the new system allows a second bite at the SP cherry. :beer:

xylophone

Your new state pension statement gives you a starting amount for new state pension which is the higher of your entitlements under the old and new systems - see

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

(the figures are a little out - for Basic State Pension read £119.30 and for New State Pension £155.65).

Presumably your "starting amount " is around £129 and you have more than six years to go before you reach SPA - you can therefore increase your SP to the full amount by making the necessary contributions.

https://www.gov.uk/new-state-pension/how-its-calculated

juju17

My DH checked his state pension forecast last night. He has 37 years NI contributions and it stated that based on his NI contributions up to April 2016, he would get a state pension of £137.55. It also stated that if he contributed for a further 5 years he would get a pension of £155.65.
He was contracted out. He retired early at 55, so no longer works.
So am I understanding this correctly...he could pay £733.20 x 5 = £3666.00, and then have an increased state pension of £18.10 per week.
If this is right, he would have recouped the initial outlay in 202 weeks of receiving the state pension.
Many thanks