Why is my State Pension less than my friends?

Blackavar

Linton said:

One possible reason for the difference is that your friend was at times paid more than you - the amount of SERPs (State Earnings Related Pension) you got obviously depended on you income at the time.

Thanks for input but this is very unlikely.

Blackavar

I think I will try and get an online chat with HMRC soon. This has proved fruitful in the past but in the current times may be more difficult. Thanks for everyone's input on this - much appreciated.

xylophone

You retired in 2015 and do not indicate that you have made any voluntary NI payments, therefore presumably you had 45 years NI by 2016.

At 6/4/2016, two calculations were done for all those under SPA.

 In your case, under the old scheme, you had 30 years + of NI and therefore you qualified for (at least) the Basic State Pension.  You may also have qualified for Additional State Pension (Graduated Pension/State Earnings Related Pension/State Second Pension)

Thus 30/30 x £119.30 + ( Additional State Pension - a deduction if at any period you were Contracted Out of ASP).

Under the new scheme you had 35+ years of NI and therefore

(35/35 x £155.65) - (if appropriate) a deduction of your Contracted Out Pension Equivalent). 

Your starting amount was the higher of the two.

Are you sure that you were not contracted out into an occupational or private pension for much of your career?

Your friend's pension indicates that he was contracted in for much of his.

https://moneytothemasses.com/saving-for-your-future/pensions/readers-question-how-can-i-check-my-graduated-pension-benefit
https://adviser.royallondon.com/technical-central/pensions/state-benefits-pension-manuals/state-second-pension-explained/

Silvertabby

As xylophone says.  When you get through to HMRC, ask them if you have a COPE - and if you do, which scheme it relates to.  If their records are correct, they will show which scheme(s) hold a GMP liability (and therefore pension benefits) for you.

In the meantime, have you ever worked in the public sector?  If so, you would have probaby been enrolled automatically into their (contracted out) pension scheme. 

I couldn't begin to guess how many people have left Local Government, been issued with a LGPS deferred benefit statement - or the offer of a pension at NRA - and then rang us to say '...........but I never joined'. 

Blackavar

Never worked in public sector but understand the question - Thanks

Blackavar

xylophone said:

You retired in 2015 and do not indicate that you have made any voluntary NI payments, therefore presumably you had 45 years NI by 2016.

At 6/4/2016, two calculations were done for all those under SPA.

 In your case, under the old scheme, you had 30 years + of NI and therefore you qualified for (at least) the Basic State Pension.  You may also have qualified for Additional State Pension (Graduated Pension/State Earnings Related Pension/State Second Pension)

Thus 30/30 x £119.30 + ( Additional State Pension - a deduction if at any period you were Contracted Out of ASP).

Under the new scheme you had 35+ years of NI and therefore

(35/35 x £155.65) - (if appropriate) a deduction of your Contracted Out Pension Equivalent). 

Your starting amount was the higher of the two.

Are you sure that you were not contracted out into an occupational or private pension for much of your career?

Your friend's pension indicates that he was contracted in for much of his.

https://moneytothemasses.com/saving-for-your-future/pensions/readers-question-how-can-i-check-my-graduated-pension-benefit
https://adviser.royallondon.com/technical-central/pensions/state-benefits-pension-manuals/state-second-pension-explained/

Massive thanks as usual Xylophone - a lot of info there. Let me check through this to see if I can make sense of this. I did pay a small amount into a private pension for much of my career so I will check their statements.

Blackavar

Okay, so I have read through the letter 'Award notice and statement details' and I get an additional 2p per week under 'protected payments'. I will ask my friend to check his statement letter to find out where he gt the additional from.

molerat

Blackavar said:

Okay, so I have read through the letter 'Award notice and statement details' and I get an additional 2p per week under 'protected payments'. I will ask my friend to check his statement letter to find out where he gt the additional from.

If you friend retired post 2016 then theirs will have exactly the same source.  Protected Payments is purely any amount above the maximum new state pension amount earned pre 2016 and has a separate inflationary increase applied. The only way to find out why the amounts are different is to query your personal accounts with DWP.

Blackavar

I stopped work in 2015 and he is still working. I'm sure its down to gaps in my employment due to some months out travelling many years ago and 3 redundancies taking a few weeks/months to become re-employed. I await his statement info with interest.

sheramber

My state pension letter told me how the amount was made up.