Help understanding SP forecast.

Takedap

I have recently been made redundant & was also lucky enough to be able to take early retirement with access to my Final Salary pension based on 38 years service.


As suggested on this site, I have obtained a State Pension forecast via the Gov.UK website but I now need help in understanding what it is telling me.


The various bits of information below have been cut & pasted directly from different parts of the website.


Your National Insurance record

Summary

You have:

• 40 years of full contributions
• 10 years to contribute before 5 April 2026

You do not have any gaps in your record.


Your State Pension

You can get your State Pension on 22 May 2026. Your forecast is
£155.65 a week
£676.80 a month, £8,121.59 a year
Your forecast

• is not a guarantee and is based on the current law
• does not include any increase due to inflation

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2016

• £119.30 a week

Forecast if you contribute another 9 years before 5 April 2026

• £155.65 a week

£155.65 is the most you can get

You cannot improve your forecast any further, unless you choose to put off claiming.
If you’re working you may still need to pay National Insurance


Contracted Out Pension Equivalent

The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.
Your COPE estimate is £109.96 a week.



So the questions are:

Is my pension forecast to be £155.65/wk? Or

£119.30/Wk unless I go back to work & pay another 9 years NI? (which would give a total of 49 qualifying years) Or

£119.30/Wk presumably based on paying a lower rate NI while contracted out but not specifically stated as such.

I've seen on the MSE site that it may be possible to make voluntary NI contributions but I can't find anything on the GOV.UK site. How does this work, is it possible in my case & if so, is it worth it?

molerat

Your pension currently stands at £119.30 and you can add to it by contributing for another 9 years by whatever means, employment, benefits credits or voluntary contributions.

Your current amount seems to be based on 30 years basic pension with no S2P.

https://www.gov.uk/pay-voluntary-class-3-national-insurance/overview

You will recoup the outlay in 3-4 years once the pension comes into payment. A one off £733 payment will give £4.45 a week for life.

Takedap

Thank you for this. Why have they based the amount on 30 years when I have already paid 40 years in NI contributions?

molerat wrote: »

Your pension currently stands at £119.30 and you can add to it by contributing for another 9 years by whatever means, employment, benefits credits or voluntary contributions.

Your current amount seems to be based on 30 years basic pension with no S2P.

https://www.gov.uk/pay-voluntary-class-3-national-insurance/overview

You will recoup the outlay in 3-4 years once the pension comes into payment. A one off £733 payment will give £4.45 a week for life.

minty777

How much do you need to earn in a tax year for it to count as a full year?
What i mean is can you work for 6 month in a tax year but it will count as a full year because you have earned over a certain amount?

JezR

Takedap wrote: »

Thank you for this. Why have they based the amount on 30 years when I have already paid 40 years in NI contributions?

As prior to the introduction of the new state pension, you needed 30 years of NI to qualify for a full basic state pension.

xylophone

http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html

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

The figures used in above are slightly out.