New State Pension

colinH_2

Hi, has anybody claimed the new state pension and got the full £155.60 as I have been told that I will get a reduced amount as I contracted out for 6 years with a company pension scheme. I have 43 qualifying years and so I have 37 years remaining to get the full state pension but I am told it will still be reduced. Has anyone experienced this or can explain my position as I don't fully understand the new system as I thought it was going to be easier with everyone getting the full pension amount with the necessary 35years or more to qualify.


Regards colinH

Asghar

How old are you, meaning how long have you got left till you reach state pension age?

If you had opted out for any number of years before April 2016 then the new state pension will be deducted accordingly and you will not at the moment quality for the full £155.65 as the benefit of opting out should make up at least the difference.

I said at the moment because if you have some years left to retire then any future NI contributions you make after April 2016 will keep adding to the current forecast, for every new qualifying year your pension will increase by £4.45 until you get to the new state pension of £155.65, if you have enough years left that is.

Have you checked your forecast at:
https://www.gov.uk/check-state-pension

xylophone

You have obtained your new state pension forecast?

https://www.gov.uk/check-state-pension

And see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

but for Basic State Pension read £119.30 and for New State Pension £155.65

At 6 4 16 your entitlement under the old scheme was calculated as a full Basic State Pension (119.30) plus any graduated pension and Additional State Pension minus a deduction to take account of the fact that you had been contracted out.

It was calculated under the new scheme as a full New State Pension minus a deduction for contracting out.

Whichever of the above gives you the higher amount is your "starting (foundation) amount for New State Pension.

If your foundation amount is equal to the full NSP, this is what you will get at your State Pension age. It will not increase, even if further qualifying years are added to your National Insurance record.

If your foundation amount is higher than the full level of the NSP you will get the extra amount as a separate protected payment. This will be paid on top of the full single-tier pension.

If your foundation amount is lower than the full NSP, you can increase the value of your state pension with further qualifying years up until you reach State Pension age.

You can do this even if you already have 35 qualifying years. This is likely to be people who were previously contracted out.

Each further qualifying year after 6 April 2016 will increase your foundation amount by 1/35th of the full single-tier pension (up to the maximum level).

YorkieMan

Elsewhere on the MSE website regarding buying additional years is a section which contains the following
" Those retiring after 6 April 2016 can buy up to 10 years' contributions. See the table below for prices...
Cost of buying additional NI years
NI Year Cost to buy now
2011/12 or before £689
2013/14 £705
2014/15 £723
2015/16 £733

However, on querying The Pension Service about making up for two missing years 2012/13 and 2013/14 they have responded.
"If you have 35 or more qualifying years, making voluntary contributions for tax year prior to April 6 2016 would not increase your State Pension amount. "
I have more than 40 'Qualifying years' though most were contracted out. When I called them they explained that "I could pay for these two years (over £1300) if I wanted to but that it would not make any difference to my pension" !
I'm not convinced that anyone actually knows what is going on regarding the new state pension. Can someone enlighten me? Is the MSE website wrong?

molerat

If you have more than 35 pre 2016 years then you cannot add to your 2016 starting amount. Purchasing post 2016 years will add to your pension. TPS are correct in your case and the MSE article is correct providing you have less than 35 pre 2016 years, even then it may not add value if you have 30 years and were contracted out.

Your 2016 starting amount is the higher of the old 30 years + additional pension or the new 35 years - contracted out deduction.

xylophone

http://www.thisismoney.co.uk/money/pensions/article-3838476/Can-pay-new-state-pension-Steve-Webb-replies.html

colinH_2

Hi, thank you for the information, I am 65 years old on 10th April 17 would you know if I purchased 1 years NI for 1 year commencing April 16 it would give me an extra £4.45per week? (as I stopped paying N I in 2010 as I already had 43 years)


Thank you


Best Regards


ColinH

Silvertabby

Hi, thank you for the information, I am 65 years old on 10th April 17 would you know if I purchased 1 years NI for 1 year commencing April 16 it would give me an extra £4.45per week? (as I stopped paying N I in 2010 as I already had 43 years)


Thank you


Best Regards


ColinH

Colin - as you are not working, and are over pension credit age (ie, State pension age for a woman born the same day as you) you should get a free credit for 16/17.

p00hsticks

colinH wrote: »

Hi, thank you for the information, I am 65 years old on 10th April 17 would you know if I purchased 1 years NI for 1 year commencing April 16 it would give me an extra £4.45per week? (as I stopped paying N I in 2010 as I already had 43 years)

Yes it would - but I donlt think in your case you actually need to pay. Assuming from your username that you are male, then you are a very similar age to my OH. From our reading so far, our current understanding is that men that are under 65 but over the equivalent womens state pension age should get creditted with NI years for the interim if they don't earn them through working.
https://www.gov.uk/automatic-pension-credits-for-men

We're currently waiting to see his updated NI records after April 2017 to confirm that this has indeed happened.

Edit: Silvertabby beat me to it while I was typing!

colinH_2

Hi, thank you for the information, do you know if I can still add a voluntary NI contribution for 2016/2017 as I have already put in to claim my state pension?


Thank you


Best Regards


ColinH

colinH_2

Thank you again for the info, I have already put in to claim my state pension do you think it is now too late for any increase to my pension


Best Regards


Colin H