Partner's State pension is different?

NorthEastforever

Hi,
I hope I am posting this in the correct category. My partner has just qualified for his state pension and his pension notice said he gets £9701 per year - which according to info I have read online, appears to be the full (max?) state pension.
I will qualify for my state pension next year but the estimate from HMRC in my case is £10,941 per year.  We both have 40 years NI contributions and my husband was told about 3 years ago that he wouldn't get anything above that even if he made additional contributions.  My initial thought was that mine is based on the assumption that pensions will go up next year (so presumably my partner's would increase to the same amount) but I spoke to my sister recently and she gets less than my partner does. She also had full NI contributions and retired last year.

Is SERPS still a thing? Could that explain the difference?
Thanks for any help!

Notepad_Phil

There is a lot more than just the number of years of national insurance that historically made up the amount of pension, so unless you worked for the same employer at the same salary and with the same company pension then you're likely to find differing state pension forecasts.

Take a look at some of the threads on https://forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning for more info.

Going forward, more and more people will find that they retire and  get the same state pension for the same number of national insurance, but it won't be until 35 years after 2016 that retiring people can be sure that 35 years of national insurance means a full state pension (and not more or less).

Bigwheels1111

Mine states.
Your forecast is £185.15 a week,
£805.07 a month, £9,660.86 a year.
I need 4 more years of Ni.
This goes up each year by a minimum of 2.5%.
Should go up by inflation this year around 10% unless the government weasel out of it for a second year.
I don’t bother voting as they are all a bunch of thieving scumbags.
But if the conservatives back out of the rise this year I will vote labour next time out of spite.

Daliah

NorthEastforever said:

Hi,
I hope I am posting this in the correct category. My partner has just qualified for his state pension and his pension notice said he gets £9701 per year - which according to info I have read online, appears to be the full (max?) state pension.
I will qualify for my state pension next year but the estimate from HMRC in my case is £10,941 per year.  We both have 40 years NI contributions and my husband was told about 3 years ago that he wouldn't get anything above that even if he made additional contributions.  My initial thought was that mine is based on the assumption that pensions will go up next year (so presumably my partner's would increase to the same amount) but I spoke to my sister recently and she gets less than my partner does. She also had full NI contributions and retired last year.

Is SERPS still a thing? Could that explain the difference?
Thanks for any help!

SERPS is definitely still a thing for those who acquired state pension entitlements pre-dating 2016 and were not in contracted-out works/personal pension schemes. It appears this is the case for both of you.

As suggested, hop over on to the Pensions board for more detailed explanations if you need them https://forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning

Daliah

Notepad_Phil said:

Going forward, more and more people will find that they retire and  get the same state pension for the same number of national insurance, but it won't be until 35 years after 2016 that retiring people can be sure that 35 years of national insurance means a full state pension (and not more or less).

....subject to Social Security legislation staying as is now. Who knows whether it will.

xylophone

My partner has just qualified for his state pension and his pension notice said he gets £9701 per year - which according to info I have read online, appears to be the full (max?) state pension.
I will qualify for my state pension next year but the estimate from HMRC in my case is £10,941 per year.  

The state pension (whether old or new scheme) was always calculated on an individual basis.

You and your spouse will receive your SP under the new scheme.

On 6/4 /16 (inception of new scheme), neither of you had yet reached SPA and therefore a "starting amount" for each of you was calculated under old and new rules- your starting amounts were the higher of the two.

Old rules

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

New Rules

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

You were both in one of three positions.

 (a) Your starting amount was equal to a full NSP.

 (b) Your starting amount was more than a new state pension,

 (c) Your starting amount was less than  new state pension.

See

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

produced a couple of years before inception of new state pension.

For more detail

https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet

NorthEastforever

Thank you everyone for all the help!
I have been on government gateway and although partner's pension has now started, it says he doesn't have complete NI records for a number of years (when he was definitely working and paying NI).  There is a note saying "we are currently checking on your NI contribution for this particular year) but he says that message was there last year when he checked.  It seems very odd they have started his pension without knowing how many complete years. I think people are saying the amount (from old scheme) is more to do with what he earned - but if they don't know he paid NI in those years it suggests they didn't know what he was earning either. I have told him to raise a query about it.  Thanks again!

phillw

NorthEastforever said:

it says he doesn't have complete NI records for a number of years (when he was definitely working and paying NI).

The trick will be proving that.

xylophone

You state that your spouse's NSP has been calculated as  £9701 a year.

£9701/52 is equal to a state pension of  £186.55 a week which is a little higher than a full new state pension (£185.15 a week,  £9627.80 a year).

This indicates that when his  starting amount was calculated at the inception of new state pension, it was already in excess of the full new state pension (see first link in my post above).

This would have been why he was told that he could not improve his state pension by further contributions or credits even though if working and earning the requisite amount, he would still be required to pay NI.

The SP would simply revalue under the index linking as specified by government.

That part of his starting amount that was equal to a full NSP (£155.65 in 2016/17) will have increased between then and his SPA under the triple lock arrangement (except for the current tax year) and the balance by CPI - this will continue  now that his SP has come into payment (as far as is known at the moment).

Your spouse's starting amount was given by the old rules calculation.

It is clear that he was entitled to at least the full old basic (£119.30 in 2016/17).

The question is how much  Additional State Pension (Grad/SERPS/S2P) he may have accrued  between 1972(?) and 2016.

Was he ever "contracted out"?