Opted Out

Mandy007

Both myself and husband were opted out, my husband for all his working life and myself for 12 years. The new rules which came into affect in 2016 appears to mean that we cannot get a full state pension even though we both have over 41 years worth of contributions. 
It appears that as we both stopped work (one in 2015 and the other in 2016) that we now have missed contributions.   Of course we do as we haven't worked. However, even if we paid in more, because we were opted out we have been told we can never get the full state pension.
I think this is something people should be aware of when considering if to buy more contributions.

AlanP_2

Are you sure that you can't make voluntary contributions to boost your SP?

What does your actual forecast say?

At a basic level don't forget that you were opted out so paid less NI than those in the SERPS element of SP and will have built up an employer pension instead. 

p00hsticks

Mandy007 said:

Both myself and husband were opted out, my husband for all his working life and myself for 12 years. The new rules which came into affect in 2016 appears to mean that we cannot get a full state pension even though we both have over 41 years worth of contributions. 
It appears that as we both stopped work (one in 2015 and the other in 2016) that we now have missed contributions.   Of course we do as we haven't worked. However, even if we paid in more, because we were opted out we have been told we can never get the full state pension.
I think this is something people should be aware of when considering if to buy more contributions.

You mean 'contracted out', not opted out - you were paying a lower rate of NI and so didn't accumulate any additional pension, but should instead have been part of some sort of private or company pension.

You need to give details of what your individual pension forecasts say for people to comment fully, but it's not generally true that people cannot get to the full state pension because they've been contracted out - and any contributions you can make for years after 2016 will increase your forecast if it is currently less than the maximum. 

Basically - if you;ve had many years contracted out, and at least 30 NI years up to 2016, then chances are that when your 'starting amount' was calculated in April 2016 it would have been that under the old rules - which would hav entitled to you to a minimum of £141.85 a week. 

Every NI year earned, creditted or bought with voluntary contributions since then will add £5.29 a week to your forecast until you either reach the maximum of £185.15 or you reach the year in which you reach state pension age. So people who are able to add around 8 or 9 post-2016 years to their NI records will qualify for the new full maximum, even if they spent their whole lives prior to 2016 contracted out (contracting 'in' and 'out' was done away with when the new State Pension was introduced in 2016, simplifying the system). 

Those who were contracted out and reach SPA earlier than 2024 may never be able to make it up to the new maximum, but will still get at least what they woudl have got under the old rules, and in many cases will have the opportunity to add to it. 

molerat

Mandy007 said:

Both myself and husband were opted out, my husband for all his working life and myself for 12 years. The new rules which came into affect in 2016 appears to mean that we cannot get a full state pension even though we both have over 41 years worth of contributions. 
It appears that as we both stopped work (one in 2015 and the other in 2016) that we now have missed contributions.   Of course we do as we haven't worked. However, even if we paid in more, because we were opted out we have been told we can never get the full state pension.
I think this is something people should be aware of when considering if to buy more contributions.

That is a complete misrepresentation of how it works. 

You have the opportunity, by working and paying NI or making voluntary contributions, to top up your 2016 starting amount with post 2016 contributions.  That starting amount was no more or less than you had already accrued under the old system. You may or may not be able to reach the full amount depending on your personal circumstances but you will certainly be able to add to it. In fact you are a winner.  If you stopped work under the old system with 41 years that was it, nothing could be added. There have been 6 years since 2016 so just over £31 is available to add.

When do you reach SP age ?  Have you had pension forecasts ?  If so what exactly do they show ?

Buying missing years is generally one of the best ways you could spend money, the equivalent of a 30% annuity, something that can only be dreamed of on the open market.

dunstonh

Both myself and husband were opted out, my husband for all his working life and myself for 12 years. 

I think you mean contracting out.    Not opted out.  Opting out is what you do if you choose not to join your occupational pension.  Contracting out is what you do when contracting out of SERPS/S2P.

The new rules which came into affect in 2016 appears to mean that we cannot get a full state pension even though we both have over 41 years worth of contributions. 

Your state pension under the pre 2016 changes would have been lower as well.  So, you are no worse off.  Indeed, you are potentially better off depending on your post 2016 qualification (although you stopped work so that is unlikely to apply unless you were getting benefits that treats you as getting NI paid.

Albermarle

Probably best to speak to these people .

Contact the Future Pension Centre - GOV.UK (www.gov.uk)

xylophone

See

https://forums.moneysavingexpert.com/discussion/comment/79226522/#Comment_79226522
and read the links carefully.

What exactly does each forecast say?

What is the COPE shown on your forecasts?