Uncovered pension errors HMRC

Silvertabby

Albermarle wrote: »

I was contracted out of SERPS for 20 years but will still get the' full pension' . However it is capped and although I am still working it will not increase.
Like the OP I was a bit confused by this and after some digging it seems that if I had not been contracted out , I would have received even more . i.e. full pension and then extra ( I think would have been over £200pm in total ) . The rules are complicated and in addition we are in a transition phase from one system to another which makes it more complicated.

What's better? £200 per week State pension only, or £165 per week plus your 20 years worth of contracted out occupational pension?

sevenhills

xylophone wrote: »

Does your pension forecast show a COPE?

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xylophone

like the OP I was a bit confused by this and after some digging it seems that if I had not been contracted out , I would have received even more .

https://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme

https://en.wikipedia.org/wiki/State_Second_Pension

A high earner who had never contracted out could be receiving state pension of around £300 a week.

With regard to the OP, from 1988 it was possible to contract out of SERPS into a pension provided by an insurance company.

NI rebates were paid into the pension - former protected rights which became ordinary DC pension rights in 2012 when contracting out for non occupational schemes ended.

https://www.aviva.co.uk/frequently-asked-questions/faq/answer/4656/

At 6/4/16, two calculations were done for the OP

NI years/30 x £119.30 + (Additional State Pension - deduction for contracting out)

(NI years/35 x £155.65) - COPE.

His starting amount was the higher of the two.

See

https://www.gov.uk/new-state-pension/how-its-calculated

sevenhills

My Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £25.86 a week
This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

Albermarle

What's better? £200 per week State pension only, or £165 per week plus your 20 years worth of contracted out occupational pension?

It was actually some time since I looked , and I can not remember the exact figures but at the time I did an approx. calculation and I think it was about 50:50 either way .

xylophone

My Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £25.86 a week

See post 14 above for calculation done 6.4.16.

You will not know the ASP figure but you will know how many NI years you had at 6/4/16.

For example, suppose you had 35 full years in April 2016.

Because you had more than 30 years NI, the old rules calculation would have been £119.30 + (ASP - £25.86).

The starting amount given by the calculation under new rules would have been £155.65 - £25.86 = £129.79

Whichever was the higher of the above would have been your starting amount.

See (but bear in mind actual figures at 6.4.16)


https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

With regard to the COPE

See https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

PDWUK

Just had a letter today from HMRC that they calculated incorrectly my old state pension by £37 per week since 2016! They are paying me the underpayment but does anyone in the forum know if they are supposed to pay interest on it?

xylophone

Is tax due on the repayment?

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim76005

https://www.thisismoney.co.uk/money/pensions/article-5665491/Am-getting-state-pension-Retiree-underpaid-3-800-eight-years.html

Silvertabby

“ What's better? £200 per week State pension only, or £165 per week plus your 20 years worth of contracted out occupational pension?

Albermarle wrote: »

It was actually some time since I looked , and I can not remember the exact figures but at the time I did an approx. calculation and I think it was about 50:50 either way .

Really? I'd be very surprised if that is the case. But, even if it is, have you factored in being able to access your occupational pension before SPA?

sevenhills

Silvertabby wrote: »

Really? I'd be very surprised if that is the case. But, even if it is, have you factored in being able to access your occupational pension before SPA?

Getting my money allowed me to buy my council house, definately a positive.