State Pension Forecast Query

Linton

drumtochty wrote: »

Buy reading your state pension forecast, do you have one!


That advises advises how many further years NI you have to pay to get a full "new style" state pension and if you have enough years left before state retirement age to contribute. It may be possible to pay voluntary contributions for previous missed years.

It can be more complicated than that - for example if you have less than 30 pre 2016 years but had already earned more than the new state pension in 2016 thanks to SERPS etc then filling any available pre 2016 gaps would increase your pension further beyond the new pension. In general I dont think it is clear or even can be deduced from the published forecaste whether pre 2016 years would help.

molerat

Linton wrote: »

It can be more complicated than that - for example if you have less than 35 pre 2016 years but had already earned more than the new state pension in 2016 thanks to SERPS etc then filling any available pre 2016 gaps would increase your pension further beyond the new pension. In general I dont think it is clear or even can be deduced from the published forecaste whether pre 2016 years would help.

You would need to have less than 30 pre 2016 years, and then only be able to make it up to that number, to increase the starting amount beyond the new pension max.

Linton

molerat wrote: »

You would need to have less than 30 pre 2016 years, and then only be able to make it up to that number, to increase the starting amount beyond the new pension max.

Sorry yes, 30 pre 2016 - will correct.

max11

Linton wrote: »

It can get quite complicated depending on the balance between contracted out and contracted in and your payments to SERPS/S2P/ASP. The safest way of finding out your options is to talk to the Future Pensions Centre - https://www.gov.uk/future-pension-centre. They are very helpful.

Brilliant, thank you. It does seem very complicated

RG2015

molerat wrote: »

35 years for a "full" pension is only 100% applicable for those starting their NI accrual after April 2016. Those with a history pre 2016 are on a hybrid scheme requiring more or less than 35, those who have a contracted out history will generally need more and may still end up with less than the full new pension amount. If you have in excess of 35 pre 2016 years then filling any pre 2016 years will have no effect on your pension entitlement so a waste of money.

At April 2016 you were given a starting amount which was the higher of the new accrued amount of x 35ths - COPE or x 30ths + S2P for the old amount. Whichever calculation was used you could only use the maximum number of years applicable for that system. The good news is that you can add to that 2016 amount up to the maximum new pension.

I will carry out my own research and talk to the relevant organisations but I am intrigued by the highlighted statement above and would appreciate any help on my questions below.

I have 41 years of full contributions up to 2011/2012 and can draw my state pension from April 2022 and my pension forecast quotes three possible weekly figures; £126, £140 and £149.

The first is based on my contributions to 5/4/18, the second is if I continue to contribute to 5/4/21 and the final is if I fill in the gaps from 6/4/12 and continue to 5/4/21.

Does the highlighted statement mean that it is a complete waste of money to fill the gaps prior to 5/4/16?

And secondly, will I achieve the highest figure by just filling in the gaps from 6/4/16 and continuing to 5/4/21?

xylophone

I have 41 years of full contributions up to 2011/2012 and can draw my state pension from April 2022 and my pension forecast quotes three possible weekly figures; £126, £140 and £149.

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

The BSP at 6/4/16 was £119.30.

The NSP at 6/4/16 was £155.65

You state that you had over forty full years by 2012.

Therefore the old rules calculation would have been

£119.35 + (Additional State Pension - Deduction for Contracting Out)

And the new would have been

£155.65 - Contracted Out Pension Equivalent (Rebate Derived Amount).

Your starting amount was the higher of the two.


If your starting amount was less than a full new state pension, you could increase it by NI contributions or credits from 6/4/16 up to the end of the tax year before you reached SPA.

See also

https://www.royallondon.com/contentassets/8c6335d848984476bb2e1edcd8daa045/good-with-your-money-guide-8-new-state-pension-v3-2.pdf

RG2015

Linton wrote: »

It can get quite complicated depending on the balance between contracted out and contracted in and your payments to SERPS/S2P/ASP. The safest way of finding out your options is to talk to the Future Pensions Centre - https://www.gov.uk/future-pension-centre. They are very helpful.

I have now spoken to the Future Pensions Centre and the lady I spoke to was extremely knowledgeable and helpful!

She also went out of her way to advise that with 41 years of NI years prior to 2016 that there was no point in filling my gaps prior to 5/4/16.

She did say though that before accepting any payment HMRC would ask if I had checked with the Future Pensions Centre that I would benefit from my addition NI contributions. Nevertheless, I believe that my personal statement for filling in the NI gaps should be clearer about the futility of filling some years before 2016.

molerat

RG2015 wrote: »

She did say though that before accepting any payment HMRC would ask if I had checked with the Future Pensions Centre that I would benefit from my addition NI contributions.

No they don't :cool:

RG2015

RG2015 wrote: »

She did say though that before accepting any payment HMRC would ask if I had checked with the Future Pensions Centre that I would benefit from my additional NI contributions.

molerat wrote: »

No they don't :cool:

i did subsequently speak to HMRC and they asked me if I had spoken to the Future Pensions Centre and asked if they had confirmed that my additional payment(s) would benefit me.

So I guess that sometimes they do and sometimes they don't.