New State Pension - Contracted Out Years

fretwej

I have just got my pension forecast and it tells me that I will receive about £13 (3 years worth of contributions) less than the full amount of £155. This appears to be explained as contracted out reductions while I paid into company pension schemes over many years. The statement shows that I have 45 qualifying years. I have recently taken early retirement and am nearly 62 years old. If I can add extra qualifying years by claiming NI Credits from my daughter for caring for her young daughter while she goes back to work, will this offset the contracted out reduction or will it have no effect? Will the contracted out reduction still be applied regardless of how many extra qualifying years I may be able to claim before state retirement age?

molerat

You no longer have "years", you have a foundation amount post April 16 which all the calculations and deductions have been applied to. Going forward with the "new" SP any post April 16 contributions, however earned, will add to that foundation amount so yes you can claim the specified adult credits post April 16 to boost your pension, any claimed for time before April 16 will be of no benefit.

jamesd

Contracting out will no longer have any more effect on you. The April 2016 figure is your foundation amount and from this tax year on any credits, earned or bought years will add 1/35th of the flat rate per year until you reach the roughly 155 flat rate level cap. You can continue to accrue more like this until you reach your state pension age.