State Pension

Cliddy09

I've attached screenshot of non confidential bit of screen. I wonder if it helps?

Dazed_and_C0nfused

Cliddy09 said:

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?

Because that's not what the legislation said.

You are under transitional rules and will need to add some post 2016 years to reach the standard amount of £175.20.

If you don't like it then your MP is the person to approach but it's not to change anything now 5 years after the new system started.

molerat

Quite simply they closed off your state pension account at April 2016 and did a calculation to see if you were better off under the new or old schemes at that point.  You did not lose anything and may have been better off if the new calculation was higher.  If that starting amount was less than the new full pension you could then make it up with post 2016 contributions if below pension age.  Under the old rules you could still only have used 30 of your 42 years for basic pension calculations so nothing has changed.

xylophone

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

squirrelpie

Cliddy09 - you are better off than many. You have the benefit of being contracted out and the bonus that brought to your private (company) pension, and now you have the possibility to compensate to bring your state pension up to the maximum possible as well. That wasn't possible under previous legislation. So the change in pension law has benefited you. Remember also that NI payments don't just pay for your pension, so it's not that you've overpayed for anything.

[Deleted User]

Cliddy09, this is not a situation exclusive to yourself. A vast number of people come under transitional rules and we are all affected according to our own circumstances. The explanations provided show you are in the correct position and you needn't dwell on any perceived injustice. Regards

p00hsticks

Cliddy09 said:

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?

Because that's just how it works.

Prior to 2016, under the 'old' rules you got a full 'basic' pension as soon as you had 30 years NI - any more years didn't result in any  further increases (ignoring any additonal pension if you were contracted in, which you say you weren't).

Because you were contracted out,  when they did the calculations at the introduction of the new State Pension in 2016, the amount you got under the old rules was higher that that under the new rules, so that was your 'starting amount'.

Under the new rules, any NI years earned or credited since 2016 will increase your forecast by 1/35th of the new State Pension amount until either the maximum amount is reached or you reach State Retirement Age, whichever is sooner.  

Your screenshot suggests that you have some pre-2016 years that are not full. it's almost certain that there is not going to be any benefit to you in making those up.

If - as that screen shot shows - you have 42 full years and 7 part years all before 2016 then I imagine you musrt be very close to State Pension Age, if not already there. What exactly does your forecast say ?