State Pension Forecast

True_Blue_64

Hi Everyone,

I've been reading the forums here for a short while and have found it really helpful so I was hoping to get some guidance on something that's confusing me. My state pension forecast is for the maximum £159.55 and I understand I can't improve on that. The pension isn't due until 2031 and I have paid full NI since 1980. I'm pretty sure that I have been contracted out for about half my working life (the COPE amount in the forecast is £53.08 but I gather I don't deduct that from the £159.55 - please correct me if I'm wrong here), so it surprised me that I had already accumulated the maximum at age 53 and I'm wondering whether there has been a mistake. I was widowed in November last year but it was my understanding that under the new pension changes, there's no longer any way to 'inherit' the NI contributions my wife paid. But unless there has been a mistake, I think that would be the only explanation.

Sorry to ramble on a bit but would my best course of action be to question the amount that's been forecast for me?

Thanks for any help

molerat

Does it state your forecast amount or current amount is £159.55 ?

True_Blue_64

Hi molerat, the page says the following:

...Your forecast is £159.55 a week...
Your forecast... is based on your national insurance record up to 5 April 2017
...£159.55 is the most you can get
...you cannot improve your forecast any more
If you're working you may still need to pay national insurance contributions until...2031 as they fund other state benefits and the NHS

Thank you

Mnd

I agree that it is a bit confusing I am 63, working 47 years and built up a good occupational pension just under £7k per annum, but dispite that my state pension is more than the new state pension. I realise I am a winner out of the system and so are you, so don't worry

Linton

Your forecast means what happens if you continue to pay NI until your SPA. Under the new pension scheme if after 35 NI years you havent reached the £159.55 because of being contracted out further NI contributions after 5th April 2016 will add about £4.59/year to your state pension until it reaches £159.55.

True_Blue_64

Thanks Linton. I hadn't realised that the forecast makes the assumption that we all continue working until SPA. That makes sense in terms of what's been projected for me but it's still a bit confusing. You'd think they would say 'your forecast is x based on NI contributions paid to April 2017 and y if you continue to pay NI contributions to age 67. it makes it difficult to plan ahead, but thanks for clarifying :-)

p00hsticks

True_Blue_64 wrote: »

You'd think they would say 'your forecast is x based on NI contributions paid to April 2017 and y if you continue to pay NI contributions to age 67. it makes it difficult to plan ahead, but thanks for clarifying :-)

The forecast does show both what your current record entitles you to and what you could achieve if you carry on getting NI credits for future years.

xylophone

Hang on a minute - the OP had more than 35 years NI at 6.4.16 and he had only been contracted out for half his working life.

Two calculations would have been done.
Old rules

£119.35 (because he was entitled to full BSP) + (SERPS/S2P - Deduction for contracting out)

New rules

£155. 65 - COPE.

His starting amount would have been the higher of the two.

Have a look at this old state pension forecast here


http://moneytothemasses.com/saving-for-your-future/pensions/readers-question-state-pension-forecast-explained

It would not have been impossible for his SERPS/S2P amount to have been in the region of £90 or so - in which case under old rules he may well have had a starting amount close to a full new state pension even after the COD and have reached the full amount after the 2016-17 year was added.

In this case, he would still have to make NI contributions up to SPA if he were working and earning the appropriate amount, even though he could not increase his state pension by so doing.

The OP could ring and check his understanding of his forecast.

He could look at https://www.whatdotheyknow.com/request/265096/response/646107/attach/2/single%20tier%20valuation%20contracting%20out.pdf

(but for BSP read £119.30 and NSP £155.65).

IanSt

I believe that the forecast will have two calculations if you can improve your state pension. The first will be "Estimate based on your National Insurance" and the second "Forecast if you contribute another <number> years"

e.g. something like

Estimate based on your National Insurance record up to 5 April 2016
£XXX.XX a week

Forecast if you contribute another XX years before 5 April 2028
£XXX.XX a week

But given that your forecast says "you cannot improve your forecast any more" then I believe you are at the maximum amount you can receive and under current rules could give up work now and never pay any further National Insurance and still get that amount (with uprating) at state pension age.

Anyone disagree with the above? I hope not as my forecast also states that I cannot improve my forecast any more and does not have a forecast if I contributed further National Insurance.

Deneb

IanSt wrote: »

But given that your forecast says "you cannot improve your forecast any more" then I believe you are at the maximum amount you can receive and under current rules could give up work now and never pay any further National Insurance and still get that amount (with uprating) at state pension age.

Anyone disagree with the above? I hope not as my forecast also states that I cannot improve my forecast any more and does not have a forecast if I contributed further National Insurance.

I think the exact wording is £XXX.XX is the most you can get, but it does not necessarily mean that you will get that amount without any further contributions.

My forecast is £150.80 per week.

"Estimate based on your contribution record up to 5th April 2017 is £128.01 per week.

Forecast if you contribute until April 2022 is £150.80 per week.

£150.80 is the most you can get."

This is because I was contracted out for my entire working life and I have insufficient full years left until SRA to contribute sufficient NI to increase my entitlement to the full NSP amount.

So you need to be clear on the figures in your own forecast. Are your estimate up to 5th April 2017 and your forecast if you contribute to your SRA both for the same amount?

enthusiasticsaver

I would be surprised as well that you had already reached maximum given that you are only 53 and have a reasonably large COPE amount.

My state pension forecast also had two figures and I have been contracted out for a good proportion of my working life. It gave one based on my current contributions up to April 2017 and how many extra years I need to pay to improve on it to get the maximum. I am 57 and need an extra 5 years contributions to get to maximum. It shows me as having no breaks too as I claimed child benefit for 20 years and have worked for 37 years in total.

I would double check it by ringing them if there is an advice line.