Calculating State Pension

Dazed_and_confused

Why exactly do you think her forecast is wrong?

caveman38

Dazed_and_confused wrote: »

Why exactly do you think her forecast is wrong?

Because till a while ago, I believed that you couldn't exceed £168.60 and was unaware of SERPs until it was mentioned in an earlier post. Now you have said that she would have gained from her pre 2016 contributions it makes it clearer. Although the readings on the internet fail to explain it very well especially regarding calculations.
Thanks for helping to clarify this everybody.

xylophone

See https://www.royallondon.com/media/good-with-your-money-guides/the-new-state-pension-your-questions-answered/

On 6/4/16, two calculations were done.

At that date, your wife had more than 30 years NI so qualified for a full basic state pension.

Under the old rules, her entitlement was £119.30 (full BSP) + (SERPS/S2P

At that date, she also had more than 35 years NI so under the new rules qualified for a full new state pension.

£155.65 (full NSP)

Your wife's "starting amount" was the higher of the two calculations.

It appears therefore that by the date of introduction of the NSP, your wife's entitlement was already higher than a full NSP (because of the SERPS/S2P) and therefore even if she were still paying NI at that point, her entitlement could go no higher except in respect of the annual increase on pensions/benefits.

That portion of her pension which relates to NSP (currently £168.60) will increase under the "triple lock" - therefore for 2020-21 by earnings) while the balance (her protected payment) will increase by CPI.

https://www.moneywise.co.uk/news/2019-10-16%E2%80%8C%E2%80%8C/state-pension-will-rise-ps343-year-april-2020

caveman38

Well, I asked for an explanation and I got one. Thanks X.
Now to make things easier a couple of beers and settle down for the West Ham game

drumtochty

Caveman 38,


[FONT=&quot]There appears to be an issue with the numbers of NI years she has, it could be due to the date of her state pension statement. Not an issue that affects her state pension.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If she was working full time and all the dates of her employment from 1987 to 2016 are correct, she should have earned more SERPS and it's successor, The Second State Pension than you advise from her total forecast weekly state pension.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Did she work for a good number of years, say up to 7 part time and in those years, she may not have received enough annual salary to be credited with SERPS and SSP for that period. [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]On the other hand, she may well have been contracted out some of those years up until 2016.[/FONT]

caveman38

drumtochty wrote: »

Caveman 38,


[FONT=&quot]There appears to be an issue with the numbers of NI years she has, it could be due to the date of her state pension statement. Not an issue that affects her state pension.[/FONT]

[FONT=&quot]If she was working full time and all the dates of her employment from 1987 to 2016 are correct, she should have earned more SERPS and it's successor, The Second State Pension than you advise from her total forecast weekly state pension.[/FONT]

[FONT=&quot]Did she work for a good number of years, say up to 7 part time and in those years, she may not have received enough annual salary to be credited with SERPS and SSP for that period. [/FONT]

[FONT=&quot]On the other hand, she may well have been contracted out some of those years up until 2016.[/FONT]

She worked full time from 72 till 78 till she fell pregnant and only had a part year till she received Child Benefit from 79 and returned to part time work in 87 to date. No Contracted out but maybe a lower than normal salary on 16 hrs. PT.

drumtochty

Yes that ties in with lower than expected additional pension before April 2016.


Part time working.

molerat

HRP was introduced in April 1978. Our first was born in April 1977 and MrsM has an empty year for 77-78. 78 onwards is full with NI credits up until 97 when No2 reached 16, 19 years in all.

caveman38

Thanks everyone for the input. I've learned a lot and she's got an extra fiver.
Hopefully other MSE'rs would have gleaned something from this thread too.