State Pension

Remi22

Can anyone help me with this question please?  I have recently retired, my husband retired two years ago but he gets more pension than I do. We both have the qualifying number of NI payments but don't understand why he gets more than me.  Many thanks. 

Dazed_and_C0nfused

We both have the qualifying number of NI payments

That suggests you may be under the impression you are getting your pension under the new State Pension rules.

You are actually getting it under transitional rules where it is likely a lot of people will still get different amounts.

It depends on a number of factors, periods of contracting out, amount earned etc can influence your entitlement.

Do you think either of you are getting the wrong amount?

xylophone

At 6/4/16, two calculations were done for each of you.  As the amounts below would be unlikely to be the same for each of you, the individual calculations would be different.

NI years/30 x £119.30 (Full Basic)  + (Additional State Pension - (if applicable) Deduction for Contracting Out)

NI years/35 x £155.65 (Full NSP) - (if applicable) Contracted Out Pension Equivalent.

The "starting amount" was the higher of the two.

If your starting amount was equal to a full NSP, you could not increase it by further NI contributions - it would simply revalue under the "triple lock" system up to and beyond claiming your pension at State Pension Age.

If it was less than a full NSP, there was the possibility of increasing it by additional contributions or credits, depending on your personal record.

If it was more than a full NSP, you could not improve it by further contributions - the amount equal to a full NSP would revalue under the "triple lock" while the balance would increase by September CPI in the year preceding the new tax year.

Remi22

Dazed_and_C0nfused said:

We both have the qualifying number of NI payments

That suggests you may be under the impression you are getting your pension under the new State Pension rules.

You are actually getting it under transitional rules where it is likely a lot of people will still get different amounts.

It depends on a number of factors, periods of contracting out, amount earned etc can influence your entitlement.

Do you think either of you are getting the wrong amount?

We wondered if opting out would have an impact as husband opted out a few years ago, plus he earned more than I did.  We thought we were both getting the pension under the new State Pension rules which we thought came into effect a while ago. 
On reading your explaination, it looks like we are being paid correctly.  Many thanks. 

Croeso69

xylophone said:

At 6/4/16, two calculations were done for each of you.  As the amounts below would be unlikely to be the same for each of you, the individual calculations would be different.

NI years/30 x £119.30 (Full Basic)  + (Additional State Pension - (if applicable) Deduction for Contracting Out)

NI years/35 x £155.65 (Full NSP) - (if applicable) Contracted Out Pension Equivalent.

The "starting amount" was the higher of the two.

If your starting amount was equal to a full NSP, you could not increase it by further NI contributions - it would simply revalue under the "triple lock" system up to and beyond claiming your pension at State Pension Age.

If it was less than a full NSP, there was the possibility of increasing it by additional contributions or credits, depending on your personal record.

If it was more than a full NSP, you could not improve it by further contributions - the amount equal to a full NSP would revalue under the "triple lock" while the balance would increase by September CPI in the year preceding the new tax year.

This excellent post should be a 'sticky' really.

p00hsticks

Croeso69 said:

xylophone said:

At 6/4/16, two calculations were done for each of you.  As the amounts below would be unlikely to be the same for each of you, the individual calculations would be different.

NI years/30 x £119.30 (Full Basic)  + (Additional State Pension - (if applicable) Deduction for Contracting Out)

NI years/35 x £155.65 (Full NSP) - (if applicable) Contracted Out Pension Equivalent.

The "starting amount" was the higher of the two.

If your starting amount was equal to a full NSP, you could not increase it by further NI contributions - it would simply revalue under the "triple lock" system up to and beyond claiming your pension at State Pension Age.

If it was less than a full NSP, there was the possibility of increasing it by additional contributions or credits, depending on your personal record.

If it was more than a full NSP, you could not improve it by further contributions - the amount equal to a full NSP would revalue under the "triple lock" while the balance would increase by September CPI in the year preceding the new tax year.

This excellent post should be a 'sticky' really.

Agreed - with just one proviso.

The 'NI years' in the calculations really needs to read 'NI years up to a maximum of 30' for the first and 'NI years up to a maximum of 35' for the second, as having more NI years than the maximum required doesn't increase your pension further.

Cliddy09

I was sent here from another forum link, and the above description is excellent.
But I have another related question.
Firstly I accept everything above, if I want to bump my pension up to full value I have years I can buy. 
But........  I have additional years over and above the minimum required (42 years). If I can pay to use those years, why can't they be automatically included?
I should add that I was contracted out for a number of years hence the reduction from a full rate pension.

AlanP_2

You can't pay to use those years, assuming they were full years.

You can only pay for partial or empty years.

molerat

Cliddy09 said:

I was sent here from another forum link, and the above description is excellent.
But I have another related question.
Firstly I accept everything above, if I want to bump my pension up to full value I have years I can buy. 
But........  I have additional years over and above the minimum required (42 years). If I can pay to use those years, why can't they be automatically included?
I should add that I was contracted out for a number of years hence the reduction from a full rate pension.

As above you can only pay for part filled or empty years, you cannot double fill existing full years, but as you were contracted out it is likely that only post 2016 years would add to the pension.  If you post up details of your forecast you will be pointed in the right direction.

xylophone

https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
was produced to coincide with the introduction of the new state pension.
Did you have at least 35 years at 6/4/16?

Cliddy09

I had 42 years at 2016.
I do realise I'm being thick. But my question remains, even though I accept the reduction due to being contracted out, why wasn't the spare capacity up to 42 years used to compensate?