Full state pension is forecast but ?

elfina_2

I have done a pension forecast and am happy to know that I will be entitled to the full state pension of £159 when I reach retirement age in 12 years ( I am a 55 year old female ) My question is though, do I need to keep applying for national insurance contributions to be credited to me as I was made redundant a year ago from the LGPS and have a vague understanding that because I paid lower contributions under that scheme that I may later be penalised ?
The other question is that I have just come to the end of a 12 month period of contribution based JSA and then contribution based ESA. As the benefit payment has now stopped is there any point in still submitting sick notes to the DWP ?

Many thanks for any advice

Linton

The effect of reduced contracted out contributions should be included in the forecast. For how long were you in LGPS? How many years NI do you have? Are you sure that the forecast was based on what you have paid in now as opposed to what you could have paid in by the time you retire?

elfina_2

Thanks, I was in LGPS for A period of 9 years, left work to bring up a family, then eventually went back to LGPS for a further 10 years in a lower paid job. My National Insurance record says I have paid full contributions till now from 1980 except for 2 years when I didn't contribute anything ; 1981and 1982. Those two years were when I was in full time further education .

Silvertabby

The DWP is quite misleading in saying 'full contributions'. What they actually mean is 'full calendar year' as opposed to 'full qualifying year for new single tier pension'.

You have been contracted out for 19 years, so your State pension up to April 2016 will have been based on your entitlement under the old rules. This will be your foundation amount, and is very unlikely to be as high as £159.

I think you'll find that this £159 is on the assumption that you will work/pay NI/receive NI credits for at least a few more years.

Can you post what your foundation amount and COPE amounts are?

P.S. - you haven't been penalised by being in the LGPS. Not only did you (and your employer) pay reduced NI for these 19 years, the LGPS is committed to paying you the equivalent of the money 'adjusted' from your State pension as part of your LGPS pension.

Linton

So you have exactly 35 years total NI of which 19 years was contracted out with LPGS. I would have expected a significant reduction from the full new state pension. Does your forecast refer to COPE?

Dazed_and_confused

Elfina

Are you sure you've read the forecast correctly?

From the other details you've supplied it sounds as though the full amount would only be payable if you make further contributions over the next few years (each extra year adds approx £4.50 until you reach the full £159).

I would go back onto your personal tax account and read the state pension forecast carefully as it wouldn't surprise me if your actual entitlement built up so far is less than £159.

GSP

Elfina, when you say you have done a pension forecast, is this using the Gov.uk site?

If not, look at the information in there which will provide details which may answer you query.

Alice_Holt

elfina wrote: »

The other question is that I have just come to the end of a 12 month period of contribution based JSA and then contribution based ESA. As the benefit payment has now stopped is there any point in still submitting sick notes to the DWP ?

Couple of points:
1) If you meet the requirements for the ESA Support Group -
https://www.benefitsandwork.co.uk/employment-and-support-allowance/esa-glossary/1353-support-group-descriptors
- then your contribution-based ESA payments can resume.

2) If you continue to claim ESA in the WRAG group, you will receive NI credits (although no weekly ESA payment) towards the SP. Over 12 years this is worth c.£55 pw in SP payments at SPA.
See this article http://www.thisismoney.co.uk/money/pensions/article-3725546/I-m-ill-NI-credits-state-pension-Steve-Webb-replies.html
I am assuming you are not eligible to continue an Income - Based (means tested) ESA claim and therefore could receive ESA payments?

3) By this stage you should have been assessed (the WCA) and allocated to an ESA group. After this you do not need to continue to supply fit notes. This should take place 13 weeks after applying for ESA. If you are still supplying fit notes, it indicates that the WCA has not taken place. I would suggest you contact your local CAB for advice if this is the case, as the DWP have made an assumption about your correct ESA group.
https://www.citizensadvice.org.uk/about-us/how-we-provide-advice/advice/

bostonerimus

The whole "contracting out" scheme has to go down as one of the worst financial fiascos in history because of how many people it has affected. When people are unsure of their level of state pension, which is the foundation of many retirement plans, it really speaks to some systemic issues. I'm so glad I was never contracted out. I suggest that the OP looks carefully at her forecast and writes to HMRC with questions informed by the comments here.

The government gateway gave me a very clear pension forecast and indicated exactly how much more I needed to pay to get to the full pension amount.

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

Estimate based on your National Insurance record up to 5 April 2016
£150.44 a week
Forecast if you contribute another 2 years before 5 April 2028
£159.55 a week
£159.55 is the most you can get

You cannot improve your forecast any further, unless you choose to put off claiming.

GSP

Bostonerim..., yes agree, what were they thinking.

molerat

Yes many people have been affected by contracting out but unfortunately for your argument it is mostly in a positive way. Just because many cannot (or cannot be bothered to) understand it, the benefits of what they gained from the pension they were contracted into, the reduced amount of NI they paid and the effect it has on the (new) state pension does not mean it is bad thing.

Myself and MrsM have known how much pension we would be getting since early retirement back in 2009 and planned accordingly.The government have thrown a spanner in the works by giving MrsM even more than we planned and then giving us both the opportunity to cheaply add even more still but hey, you have to take the rough with the smooth

No one gets any less than they were already entitled to, that old scheme figure already had a deduction made for contracting out.