State Pension plus Works Pension

Alex444

Hi, retired from Fire Service with full pension, and on achieving 65yrs was awarded State Pension, with a deduction as I have a Local Authority Fire Pension, this means on current rates I loose approx £15.00 a week.
My mate has a private works pension and he has deduction from his State Pension, so does not receive full amouof approx £165.00 per week.
Spoke with a friend last night who retired from Naval Dockyard (MOD) last week, he is 67yrs of age, and for the last 2 years has been paid an State Pension of £196.00 per week and is expecting to continue being paid at that rate.
Do not understand the calculations for this, told him to watch out for COPE, which went over his head!
Any ideas how this rate of SPA is possible with a work's pension?

molerat

You do not get a deduction from your state pension for receiving a "works" pension, not even COPE is deducted. Whilst in a contracted out pension you would have not paid as much NI and not received the benefit of SSP which could add quite a large amount to the basic pension. When did you start receiving your state pension ?

Alex444

Started receiving State Pension October 2016.

molerat

So you started early on in the new system and are receiving exactly what you had expected under the old system. The only down side for you is that you had no opportunity to make it up with post 2016 contributions. The dockyard worker could have received some S2P top up or had some S2P from previous employment. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

p00hsticks

Alex444 wrote: »

Do not understand the calculations for this, told him to watch out for COPE, which went over his head!

When the new state pension was intorduced in April 2016, two calculations were done for everyone

Under the old rules;
(number of NI years up tp maximum of 35 / 35) x 'old basic state pension' amount of around £119.35) + any additional SERPS / S2P acculated by being 'contracted in'

Under the new rules;
(number of NI years up tp maximum of 30 / 30) x 'new state pension' amount of around £155.5) - any COPE amount from being 'contracted out'

(sorry, I can't recall the exact monetary amounts used)

The higher of these two values became a persons 'starting amount' at 2016.

If less that the full new state pension amount, any subsequent NI years would add 1/35th of the amount until the full amount was reached.

If geater than the full new state pension amount, the starting amount is protected but could not be increased further by adding extra NI years.

The amount is increased each year according to the triple lock rules.

Alex444

I should get £168.90 on the new rate of SPA, but only receive £150.00 per week due to the fact I have a works pension.
My friend has a work pension and he does not get £169.70, his wife gets her SP next week and will not receive £169.70 due to having a local authority pension.
My wife has no work pensions and will receive the full SPA of £169.70 next September (2020)
How can a retired worker get £196.00 a week whilst collecting a works pension as well?

molerat

Why do you think should you get £168.90 ?

Mnd

I'm quoted state pension 196 per week, but I have a works pension of 7400pa as well.
Pension starts in January

xylophone

How can a retired worker get £196.00 a week whilst collecting a works pension as well?

It seems that your friend started receiving his SP in 2017.

While employed by the MOD, he will presumably have been in the CS pension scheme (contracted out until 2016)but you do not say when or how long he has been in this post or whether in previous employments he was contracted in or out.

He may well having been working and paying NI for fifty years.

I'd say that he is virtually certain to have done at least 35.

At 6/4/16, his calculation under the old rules is likely to have been

£119.30 + ( Additional State Pension - deduction for contracting out)

New Rules

£155.65 - COPE)

His starting amount under old rules was likely to have been the higher of the two.

Let's suppose for a large part of his working life he was not contracted out and so has accumulated a lot of additional state pension.

For example, suppose his ASP was around £95 a week and his COPE was £20 a week.

This would have given him £119.30 + (£95 - £20).

Thus his SP would have been £119.30 + £75 = £194.30 a week.

Alex444

Worked his full life in MOD/Babcock and got his state Pension 2 years ago.

drumtochty

It would appear he had 7 to say 10 years in a pension that was not contracted out between 1978 and 2016.