difference between wife and my state pension forecast

gerdo

Hello, I was just checking our state pension forecasts. I was born in July 1961 and wife December 1961. My forecast is £200 per week and I have 41 years full contributions. Wife's forecast is £185 and she has 43 years full contributions.

Can anyone tell me why I am due more, with less years contributions?

Brie

Did she take a break at some crucial point?  Have a contracted out pension?  Earn significantly less in some years???

MallyGirl

it is not just about years. you may have been contracted out at times

gerdo

She was contracted out for 1 year, I was contracted out for 4 years. I didnt realise the amount we earned could make a difference. She did earn a lot less than me.

MallyGirl

What you earned doesn't matter as long as NI contributions were made.

What exactly do the pension forecasts say? Yours is above the full pension so you must have an extra 'bit' accrued - I am sure someone will be along to explain what that might be.

TheMilkmansDad

indeed - as the max current state pension is £185.15 pw it looks like yours is the odd one and has been "boosted" for some reason.

From Gov.uk
https://www.gov.uk/new-state-pension/what-youll-get

The full new State Pension is £185.15 per week.

The only reasons you can get more than the full State Pension are if:

• you have over a certain amount of Additional State Pension

• you defer (delay) taking your State Pension

xylophone

Hello, I was just checking our state pension forecasts. I was born in July 1961 and wife December 1961. My forecast is £200 per week and I have 41 years full contributions. Wife's forecast is £185 and she has 43 years full contributions.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

On 6/4/16, a new state pension scheme was introduced.

For all those beginning their " contribution lives"  at or after that date, 35 years NI would be required for a full new state pension.

Everybody else ( the rest of the population aged over 16 and under State Pension Age) came under "transitional rules".

These rules required that  individual calculations under old and new  systems were done to establish  the "foundation amount" for new state pension.

Under both systems, if a person had  ever been "contracted out" of SERPS/S2P, a deduction was made to reflect that fact.

Under the old system, 30 years NI were required to achieve a full Basic State Pension.

Under the new system, 35 years NI would be required to achieve a full New State Pension.

It would appear that each of you had at least 35 years at 6/4/16.

 If so, the calculations for each of you were

Old Rules

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

In the case of you and your wife

£119.30 + (Additional State Pension -  Deduction for Contracting Out).

New Rules

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

In the case of you and your wife

£155.65 (Full NSP because you had at least 35 years) - COPE.

Your  foundation (starting) amount was the higher of the two calculations.

You should be aware that the amount of Additional State Pension varied for each individual according to the amount he /she earned.

The size of any deduction for contracting out/COPE varied according to individual circumstances ( particular pension scheme/number of years contracted out/whether pension was deferred etc)

Some information concerning  SERPS (1978 -2002)

https://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme

And S2P (2002 - 2016)

https://en.wikipedia.org/wiki/State_Second_Pension

It would appear that at 6/4/16, your wife under one or other calculation had reached a full NSP.

It would appear that you had reached an amount that was higher than a full NSP.

Since then, although both of you may have been paying NI and will continue to do so (if working and earning the relevant amount) up to state pension age, this has not increased your SP.

In your wife's case, her  "starting amount" has revalued under the triple/double lock to the current full NSP.

In your case, that part of your starting amount that was equal to a full NSP has revalued under the triple/double lock to the current full NSP, while the balance (the "protected payment") has revalued by CPI.

Dazed_and_C0nfused

TheMilkmansDad said:

indeed - as the max current state pension is £185.15 pw it looks like yours is the odd one and has been "boosted" for some reason.

From Gov.uk
https://www.gov.uk/new-state-pension/what-youll-get

The full new State Pension is £185.15 per week.

The only reasons you can get more than the full State Pension are if:

• you have over a certain amount of Additional State Pension

• you defer (delay) taking your State Pension

The maximum new State Pension is probably upwards of £300.

The standard new State Pension is £185.15.

People under the transitional rules could well have more than £185.15.

gerdo

Thankyou xylophone for that detailed reply.

It all makes a bit more sense now.