SP Forecast Not adding Up

DairyQueen

Simple_Soul wrote: »

SAs based on the oSP rules, do not include COPE in their calculation at all.
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Sorry, but now I'm totally confused. I was of the opinion that the oSP SA was calculated using an addition for contracting-in to S2P. i.e. the algorithm was something like:

(Old basic amount based on number of qualifying years + contracted-in S2P).

And the nSP was calculated using the algorithm:

(New basic amount based on number of qualifying years - COPE)

And the higher of the two values was the SP.

My starting amount will be based on the oSP ( I have the max of 30 qualifying years) so shouldn't any increase in contracted-in periods increase my SA? Given that I currently have several periods when I am erroneously recorded as contracted-out (total of approx 4 years), then correcting those to contracted-in should up my starting amount.

Or have I completely lost the plot?

molerat

If your starting amount is based on the old calculation and you already have in excess of 30 years then only extra S2P / SERPS will increase that figure.

xylophone

You say that you have at least 30 qualifying years.


See page 4 and 5 here (but for BSP read £119.30 and for NSP £155.65).

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


At 6/4/16, two calculations were done

Full Basic State pension + (Additional State Pension - Deduction for Contracting Out).

(QY/35 x Full NSP) - Rebate Derived Amount (COPE).

Your Starting Amount was the higher of the two.

With regard to pension increases, for those on the old state pension, the BSP increases by triple link but the ASP increases by CPI.

For those on NSP, the NSP increases by triple link but any "protected payment" increases by CPI.

Simple_Soul

DairyQueen wrote: »

I was of the opinion that the oSP SA was calculated using an addition for contracting-in to S2P. i.e. the algorithm was something like:

(Old basic amount based on number of qualifying years + contracted-in S2P).

And the nSP was calculated using the algorithm:

(New basic amount based on number of qualifying years - COPE)

And the higher of the two values was the SA.

My starting amount will be based on the oSP ( I have the max of 30 qualifying years) so shouldn't any increase in contracted-in periods increase my SA? Given that I currently have several periods when I am erroneously recorded as contracted-out (total of approx 4 years), then correcting those to contracted-in should up my starting amount.

You are right and I am wrong. Sorry. Yes, if you are credited with more time contracted-in, your Additional oSP will increase, and your COPE will decrease.

COPE is only used to get the starting amount in the nSP calculation. But a decrease in COPE will equate with an increase in Additional oSP.

The more contracted-in time you have, the higher your additional SP. So, you are right, this should be your aim when you are correcting your NICs record: minimising your contracted-out time, and maximizing your contracted-in time.

DairyQueen

Thanks again for all the helpful replies.

Simple_Soul

DairyQueen wrote: »

Me: "But DWP thinks I was contracted-out and they are responsible for calculating my COPE. If they are working from different records then my SP will be reduced by too much COPE."

Your Additional SP will go up as your COPE goes down, thereby increasing your Starting Amount; but I suspect that it won't be a straight forward, penny for penny, correlation between the two.

It would help you if you could see your COPE when you access your SP Forecast online. I can see mine. I think you should nag them about it until they fix it.

DairyQueen wrote: »

TO: "I will send you a detailed record of your history".

This is a breakthrough. Having their records in print form, will be so much easier to correct, than trying to do it verbally over the phone. Make sure you chase it if it does not materialize. I hope you made a note of the name of the person who promised you this, so that you can chase it more effectively.

If you can persuade the DWP to send you a print-out of their records too, it will be even better.
Keep copies of all correspondence.

DairyQueen

I thought I would give this thread a boost as an illustration of how important it is to check the fine detail of your SP forecast.

I finally received a letter from HMRC. It summarises the outcome of their investigation into the records they held of my NI payments/credits, and contracted-in/out history, as at June 2016. Since then I have paid two years (16/17 and 17/18) of voluntary NI contributions and have not worked.

They have corrected all but one of the errors I reported last year.

I just checked my pension forecast online and this is the outcome:

Estimated SP: At June 2016 = £133.46. Now (up to 5 Apr 2018) = £162.75
Qualifying Years: At June 2016 (up to Apr 2016) = 30. Today = 32.
Estimated COPE: June 2016 = £33.54. Today = £22.64 per week.
No. of years needed: Was 5. Now 1

Years under investigation: Was 1, now 0

I assume HMRC have:
a) credited me with the 'missing' Class 1 contributions.
b) correctly recorded as contracted-in the several periods previously recorded as contracted-out.

Thus my COPE has decreased, (presumably) my starting amount has increased, and I have saved myself 3 years of voluntary Class 3 payments. :j

Happy days.