Women’s’ State Pension.

BINSKIN29

In 3 weeks I am due my first  state pension two months before my 66th birthday. I have 37Yrs NI contributions 2 more than needed and I’ve been told I cannot get a full state pension because I retired on my teaching pension eight years ago and Lived off this no benefits ever since. I am now told they changed the law in 2016 and I must pay back 4 yrs contributions. No one told me and no one believes me. Friends a few months older than me are now about £50,000 better off than I am. Unfair? 

molerat

The 35 years does not apply to you, it is only truly applicable to those starting out their NI record after April 2016. You are getting exactly the same pension you had earned up until the system changed.  Under the new system you have the benefit of being able to add to that pension, something you would have not been able to do under the old system. You need to make some very good value post 2016 voluntary contributions to add to the amount. You probably were informed of the pension changes, both myself and MrsM received letters. Agreed they were not 100% on what would be happening but the information was easily found.  I am in a similar situation to you, retiring early on a contracted out public sector pension, and made post 2016 contributions to bring the pension up but was still not able to reach the full amount. You still have time to act.

Linton

If you took your Teachers pension early it would probably have been at a reduced rate which could explain a significant difference between you and your friends.

35 years NI to get a full state pension only applies to people who spend their entire working like under the new scheme. You spent you entire working life under the old rules.  People such as yourself may get more than or less than the current full state pension depending on circumstances.  Because the Teachers Pension was a contracted-out DB scheme you paid less than the full rate of NI and would receive less than the current full State Pension, but you should receive at least what you would have done had the rules not been changed.

However, you are lucky in that for around £760/year you can buy extra NI years up to the point where you have accrued the full State Pension.  This is an excellent deal because the £760 is paid off by the extra SP in 3-4 years.  If you live for longer than 3-4 years that extra pension comes for free.

Brynsam

BINSKIN29 said:

In 3 weeks I am due my first  state pension two months before my 66th birthday. I have 37Yrs NI contributions 2 more than needed and I’ve been told I cannot get a full state pension because I retired on my teaching pension eight years ago and Lived off this no benefits ever since. I am now told they changed the law in 2016 and I must pay back 4 yrs contributions. No one told me and no one believes me. Friends a few months older than me are now about £50,000 better off than I am. Unfair? 

Unfair? No. Entirely reasonable.

parcival

I do hope we are not going to have another long thread about female state pension age.............

Malthusian

You are getting the full State Pension you paid for.

For most of your working career you got a basic State Pension (which is currently £134.25pw) in exchange for paying NI contributions to the Government, plus an additional State Pension which you could get either by paying the Government for additional State Pension, or you could also get it from your occupational pension scheme (known as contracting out). The Teacher's Pension was contracted out so you got your additional State Pension via the Teacher's Pension.

In 2016 a new type of State Pension was introduced where you get (at current rates) £175.20 per week if you paid 35 years of full NI contributions to the Government.

You have not paid 35 years of full NI contributions to the Government. Because some of your NI contributions went towards the Teacher's Pension.

Therefore if you want the full New State Pension you have to make up for those contributions that went towards your Teacher's Pension instead of the Government.

You can't have a cake from one bakery and eat a cake for free at another bakery on the grounds you've paid Bakery 1 for a cake so it's unfair that you should have to pay Bakery 2 to make you another cake.

That's how the system works. If you'd prefer the WASPI version of reality, substitute the following: you're right, it's not fair, moan moan moan, please give money to our advance fee fraud scam.

xylophone

I must pay back 4 yrs contributions.

Do you mean that your pension forecast shows that you would need to make voluntary contributions to reach the full new state pension?

See  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

The new scheme started 6/4/2016.

At that point two calculations were done for you. You say that you had 37 years NI when you retired in 2012.

 £119.30 (full Basic SP because you had the required 30 years) + (Additional State Pension - Deduction for Contracting Out).

 £155.65 (full NSP because you had the required 35 years) -  Contracted Out Pension Equivalent.

Your starting amount was the higher of the two.

You had not achieved a full NSP and had not reached SPA.

You were eligible to make voluntary contributions for years from 6/4/16 to the last complete year before SPA to increase your starting amount, in your case up to the level of a full NSP.

You do not have to make the voluntary contributions - you can simply accept the amount as it stands which will be whatever the full basic is in the year you reach SPA plus any additional state pension (S2P) you may have accrued between 2002 and 2012.

Silvertabby

BINSKIN29 said:

In 3 weeks I am due my first  state pension two months before my 66th birthday. I have 37Yrs NI contributions 2 more than needed and I’ve been told I cannot get a full state pension because I retired on my teaching pension eight years ago and Lived off this no benefits ever since. I am now told they changed the law in 2016 and I must pay back 4 yrs contributions. No one told me and no one believes me. Friends a few months older than me are now about £50,000 better off than I am. Unfair? 

OP - we are not being hard done by.  Far from it.  Not only did we pay reduced NI contributions from 1978 until we retired, we accrued public sector final salary pensions that enabled us to retire much earlier than our State pension ages.

Although we don't automatically qualify for the full single tier pension (because we didn't pay for it), we can choose to pay 4 years of voluntary Class 3 NI contributions in order to take us to the maximum £175.20 per week. 

Consider this.  Assuming we live to 88 (average longevity) and using the current rates of old basic and new single tier pensions for simplicity:

Old rules.  SPA 60 on £134.25 per week.

£134.25 x 52 = £6981.00

£6981.00 x 28 = £195,468.00

New rules.  SPA 66 on £175.20 per week

£175.20 x 52 = £9,110.40

£9,110.40 x 22 = £200,428.80

Minus £3,000 cost of buying additional 4 years = £197,428.80

Of course, the difference will be much greater than this, as I haven't taken into account compounded annual increases - which will be much higher for the new rules calculation.  And the longer we live beyond 88, the better off we will be under the new rules. 

german_keeper

As a career Civil Servant it seems obvious to me that the new state pension is a good deal for most if not all public sector workers, although back in 2016 my initial reaction was it was just a grab of an extra 1.4% NI!!
But what would interest me is an explanation of the calculation by the OP about friends being £50,000 better off.

bigadaj

Getting double bubble is surely a good thing, reduced NI contributions with the ability to top up very cheaply. Friends being better off presumably just refers to the raising of the state pension age. 

Silvertabby

german_keeper said:

As a career Civil Servant it seems obvious to me that the new state pension is a good deal for most if not all public sector workers, although back in 2016 my initial reaction was it was just a grab of an extra 1.4% NI!!
But what would interest me is an explanation of the calculation by the OP about friends being £50,000 better off.

I think that's just waspe trying to stir things up even more by cherry picking the old rules (age 60) and the new rules (£175 per week).