State pension query

Steve_666_

What I remember is that about 1987, the GOVT allowed DC pension funds to support opting out. At the time, it was suggested that you opted out for a while, and then opted back in, getting the benefits of both mechanisms

xylophone

What I remember is that about 1987, the GOVT allowed DC pension funds to support opting out. At the time, it was suggested that you opted out for a while, and then opted back in, getting the benefits of both mechanisms

On 6/4/ 16 two  calculations were done to establish your foundation (starting) amount for new state pension -it was the higher of

Old Rules

NI years/30 (max) x £119.65 (Full Basic) + (Additional State Pension - (if applicable) deduction for contracting out of Additional State Pension.

New Rules

NI years/35 (max) x £155.65 (Full NSP) - (if applicable) Contracted Out Pension Equivalent.

You would have been in one of three positions.

 (a) Starting amount equal to NSP.

 (b) Starting amount less than NSP

 (c) Starting amount in excess of full NSP.

You were in position (c).

This meant that you could not improve your position by further NI contributions although you would continue to pay up to SPA if employed and earning the relevant amount.

That amount of your forecast that was equivalent to full NSP would revalue each year under the "triple/double lock" while the balance (protected payment) would increase by CPI.

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

xylophone

Thanks. I've just looked again and it does say I was contracted out (COPE). I had no idea. How can this happen without me knowing? 😡 What does this mean and how do I find out how much I need to pay to get back on track?

Are you already drawing an occupational pension to which the COPE relates?

 Do you have the scheme booklet?

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

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1030365/contracting-out-and-the-cope-amount-in-the-online-statement-service.pdf