Checking State Pension Forecast

BarbaraG2000

I retired 15 months ago, aged 57.  Or technically I should say I chose to stop working - I have chosen not to take any of my pensions (2 occupational defined benefit, one personal) until normal pension age, but have sufficient savings and investments to bridge the gap.

Part of the calculation was that I had 35 years of NI contributions and hence would be entitled to full SP.  Then I saw something elsewhere that women in their late fifties and early 60’s needed 40 years.  So I’ve checked my state pension forecast - see screen shots.

I am puzzled as to how I’ve managed to accumulate 39 full years as I had a few years out of the work force. But it appears I received credits while I was still in education up to the age of 20, and also that those holiday jobs made enough contributions to count as a full year?

Of the years which are “not full”, the last of them says I could pay £317 to make it full - and have until next April to do so.  But since elsewhere it says I cannot improve my forecast any more, I assume there is no point in doing this?

In case it’s relevant, I have a COPE amount of £38.16 per week.

Dazed_and_C0nfused

Part of the calculation was that I had 35 years of NI contributions and hence would be entitled to full SP. Then I saw something elsewhere that women in their late fifties and early 60’s needed 40 years

Neither element of that is correct, you have misunderstood the new State Pension.

You are under transitional rules so you have an individual amount of years needed.

Only people paying NI from 2016 meet the 35 years rule.

Just for the avoidance of doubt what exactly does your forecast show for the amount you have accrued to date?

BarbaraG2000

Dazed_and_C0nfused said:

Just for the avoidance of doubt what exactly does your forecast show for the amount you have accrued to date?

Is that not the £185.15 which I screenshotted?  Or does that I assume I continue to pay in?

If it’s not that, what do I need to look for?

xylophone

See https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-forecast-explained-a24r12y9jt41

Is there any indication that you need to continue to contribute to reach your forecast?

BarbaraG2000

@xylophone

 Is there any indication that you need to continue to contribute to reach your forecast?

No. It says “you cannot improve your forecast any more.”  Which I presume means what it says on the tin - paying more won’t improve my pension.

Can anyone clarify about the COPE thing, please?  If it says my forecast is £185.15 per week and I have a COPE amount of £38.16 per week, does that mean my SP will actually be £185.15 - £38.16 = £146.99 per week?

On an earlier generation of forecasts, from quite a few years ago, there was something about State Second Pension - I seemed to have some of that as well, but it’s not mentioned on the new forecast.

QrizB

BarbaraG2000 said:

No. It says “you cannot improve your forecast any more.”  Which I presume means what it says on the tin - paying more won’t improve my pension.

Yes, that sentence means what you think it means, paying more NI will not improve your State Pension.

Dazed_and_C0nfused

BarbaraG2000 said:

@xylophone

 Is there any indication that you need to continue to contribute to reach your forecast?

No. It says “you cannot improve your forecast any more.”  Which I presume means what it says on the tin - paying more won’t improve my pension.

Can anyone clarify about the COPE thing, please?  If it says my forecast is £185.15 per week and I have a COPE amount of £38.16 per week, does that mean my SP will actually be £185.15 - £38.16 = £146.99 per week?

On an earlier generation of forecasts, from quite a few years ago, there was something about State Second Pension - I seemed to have some of that as well, but it’s not mentioned on the new forecast.

No one who currently has a forecast of £185.15 can improve that.

It's what you have accrued to date which counts, this can be improved if it's not £185.15.

Could you post the full forecast?

 Should you reach £185.15 (which you may already have done) then that is what you will be paid.  The COPE amount is not deducted.  Did you read the COPE information?  It clearly states this.

You are under the new State Pension rules as far as amount of pension is contended so you won't get anything extra.  The state second pension would have given you a higher starting amount in 2016 which meant less post 2016 years were needed to reach £185.15.

Had your starting amount exceeded the standard new State Pension amount back in 2016 you would have retained the higher amount.

BarbaraG2000

@Dazed_and_C0nfused I thought I had posted the full forecast with my OP.   Here it as again.  What’s missing?

BarbaraG2000

I did read the COPE stuff, including the following, which seems to suggest I won’t get that amount as part of my state pension, italics mine:

COPE is the equivalent of the additional state pension you would have got if you had not been contracted out of it during your career, meaning you save more into a private pension instead of the additional state pension. 

So you won’t get this as part of your state pension, but should get it instead from your workplace or personal pension scheme for the periods you were contracted out.

Beddie

You've nothing to worry about Barbara - as others have stated above, you will get the full state pension and cannot improve it.

The COPE thing is a little confusing at first glance, but no it does not come off the pension you will be paid.

All you have to do now is wait..... 

xylophone

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

At 6/4/16, a Full Basic State pension was £119.30 and a full New State pension was £155.65.


Your COPE was used once only at 6/4/16 when your "starting  (foundation) amount" for new state pension was calculated.

It represents the additional state pension to which you would have been entitled had you not at some stage in your career been a member of a pension scheme or schemes contracted out of Additional State Pension (SERPS/S2P).

It (or more likely a great deal more) will be paid by your DB Schemes.



Old Rules

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

 New Rules

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


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


You would have been in one of three positions.

Starting amount equal to full NSP

Starting amount more than full new state pension.

Starting amount less than full NSP.

If the individual's  forecast starting amount was equal to or more than a full NSP, he could not improve it any more, although if he were still under SPA and earning the relevant amount, he would still need to pay NI.

If it was less than a full new state pension, there was the possibility of improving it up to (but not more than) a full NSP by further contributions or credits.

It would appear that when you retired from employment in 2020, you had 39 qualifying years so presumably had 35 qualifying years in 2016.

If your  forecast starting amount was not at least a full NSP in 2016, your NI contributions for the years to 2020 would have improved it.

It appears that by the time you stopped work, you had achieved a full NSP. which in 2020 was £175.20.

Since then it has received a measure of protection from inflation and presumably will continue to receive such protection through the triple/double lock or some variation thereof.

https://inews.co.uk/news/uk/state-pension-therese-coffey-announces-triple-lock-to-be-replaced-by-double-lock-for-one-year-1186499