Warning: Double-check state pension forecasts after Govt admits 'significant' errors - MSE News

Former_MSE_Callum

Warning: Double-check state pension forecasts after Govt admits 'significant' errors...

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'Warning: Double-check state pension forecasts after Govt admits 'significant' errors'

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Paul_Herring

Since, once again, MSE's 'story' casually omits links to the sources, here's some:

Original source: https://www.thisismoney.co.uk/money/pensions/article-7100019/State-pension-data-blunder-means-3-given-WRONG-online-forecasts.html

Re-reports:

https://www.professionaladviser.com/professional-adviser/news/3076759/pensions-minister-admits-incorrect-state-pension-forecasts-for-over-300-000-members


https://www.dailyrecord.co.uk/news/politics/pension-data-blunder-sees-360000-16256800

gwapenut

There are 2 things I do not understand about my own national insurance record.

Firstly, it includes "full year" for the years that I was 16, 17, 18 and still at school (last year of O-Levels and 2 years of A-levels
):
You have contributions from

National Insurance credits: 52 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

Is this right?

Secondly, it says:
Your COPE estimate is£42.76 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.

but in another section it states that I will receive the maximum amount of £168.60 per week if I work another 2 years. Does this "maximum amount" mean £168 minus £43, and that they are assuming I get the £43 from my private scheme?

nick74

gwapenut wrote: »

There are 2 things I do not understand about my own national insurance record.

Firstly, it includes "full year" for the years that I was 16, 17, 18 and still at school (last year of O-Levels and 2 years of A-levels
):
You have contributions from

National Insurance credits: 52 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

Is this right?

Secondly, it says:
Your COPE estimate is£42.76 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.

but in another section it states that I will receive the maximum amount of £168.60 per week if I work another 2 years. Does this "maximum amount" mean £168 minus £43, and that they are assuming I get the £43 from my private scheme?

1) Yes, everyone used to get free NI credits for the tax years in which their 16th, 17th & 18th birthdays fell. This has subsequently stopped for people who reach those ages now, but still applies for anyone who accrued them under the old rules.

2) The pension forecast has been calculated by already taking account of the COPE amount, you don't need to deduct the £43 off anything.

Paul_Herring

gwapenut wrote: »

Firstly, it includes "full year" for the years that I was 16, 17, 18 and still at school (last year of O-Levels and 2 years of A-levels

...

Is this right?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/209123/national-insurance-single-tier-note.pdf

From 1975 16, 17 and 18 year olds were given credits if they stayed in full time education, approved training or apprenticeship to protect their state pension position. These credits were ended on 6 April 2010 because the reduction in the number of qualifying years required for a full basic State Pension at that time meant that they were no longer needed.

gwapenut wrote: »

but in another section it states that I will receive the maximum amount of £168.60 per week if I work another 2 years. Does this "maximum amount" mean £168 minus £43

No. You're in the fortunate group of winners where you can earn back up to full state pension, while still getting the benefits of contracting out.

That £43 (which may well be more or less than that amount, depending on what you did with the NI rebates while it was in your pension fund) will be coming from your private pension.

tgroom57

It's definitely broken.
Says I have 42 years of full contributions, and a COPE amount. That much sounds right- I have 42 years by my calculations too.

Then it says I need to continue to contribute National Insurance to reach the forecast amount of £151 per week, because it's currently £20 short. BUT I'm sure I read somewhere only 35 years are needed for full pension under the new schemes, and the full amount is £168 odd.

Under the circumstances, I don't think I'll pay for the couple of years that are "short".

Very interested to read comments above re COPE.

molerat

You have misunderstood. 35 years is only truly relevant to those starting out post 2016. Anyone with a history prior to that is on a hybrid scheme where you may need more or less than 35 years to reach the full amount or may never reach the full amount no matter how many years you have - I have 42 years but am £6 short of the max and cannot make it up. In 2016 you were given a starting amount of the higher of x/35ths new pension - COPE or x/30ths old pension + s2p which included a contracted out deduction, this was a £ amount and the number of years held became irelevant. If that figure was short of the maximum you can make it up with post 2016 years. If you don't pay those years you will not receive the full pension.

The errors discussed in this thread seem to be for those that were contracted out but are not showing a COPE amount which would lead to an incorrect forecast amount.

tgroom57

If I've misunderstood, then good luck to the rest of you.
You seem to be saying that a year before 2016 might not count.

Crabby

I'm 62 years old. I haven't paid NI for 11 years, I have 36 years of NI contributions, some of which where contracted out.
In 2008 my pension forecast said I needed 30 years NI for a full State pension of (in today's money) £129 per week. So I didn't need to pay any more NI.



In 2016 pensions changed.



In 2019 my pension forecast is still £129 per week, but if I start paying NI contributions from now till April 2022 my pension forecast rises to £149 per week. Also if I back fill my NI to 2016 my forecast is £160 per week. If I back fill to 2008 my pension forecast is still £160.



In April 2022 I will send a cheque for 6 years NI (about £720 per year at the moment). So for approximately £4500 I will get an extra £1500 per year pension for life.

bluenose1

Crabby wrote: »

I'm 62 years old. I haven't paid NI for 11 years, I have 36 years of NI contributions, some of which where contracted out.
In 2008 my pension forecast said I needed 30 years NI for a full State pension of (in today's money) £129 per week. So I didn't need to pay any more NI.

In 2016 pensions changed.

In 2019 my pension forecast is still £129 per week, but if I start paying NI contributions from now till April 2022 my pension forecast rises to £149 per week. Also if I back fill my NI to 2016 my forecast is £160 per week. If I back fill to 2008 my pension forecast is still £160.

In April 2022 I will send a cheque for 6 years NI (about £720 per year at the moment). So for approximately £4500 I will get an extra £1500 per year pension for life.

If you are a carer or look after grandkids you may get a NI credit without contributing further.

Crabby

No grand kids and my wife is in good health. I put my details up in the hope it might help reduce peoples confusion about State pension.