My Pension Forcast

martinCallicott

• 39 years of full contributions, from 1976 to 2014
• 3 years to contribute before 5 April 2025
• 8 years when you did not contribute enough

I worked for the same company from 1976 to 2014, 38 years, (but national insurance says 39.) i retired at 54 in 2014 and will get my state pension in sep 2025.(aged 66)
My state pension forecast is £144.33, but could get the new state pension of 185.15 if i buy more state pension years from 2014 to 2023 at a cost of 5717.40.
which is an average of £800 pound per year for an additional £275 a year pension.
i was told my state pension forecast of 144.33 is because i only payed into the basic state pension. and the higher rate after 2016, i will have to pay this extra for is the additional years from 2014 to 2023.
but that will be 48 years of contribution, this cant be right.
does any one know if this is correct.
Martin C

Flugelhorn

that sounds about right - my DH is getting the same, if you haven't worked since 2016 you can only get the basic without paying for the extra years 

tacpot12

£5717 for £2175 a year is good value. You will get back more than you have paid if you live to age 70. I would not be put off paying the £5717 if you can afford to do so.

Do you not have some other pension income, possibly as a result of opting out of SERPS? 

molerat

As you have in excess of 35 pre 2016 years and you are not receiving the full amount you would have been in a contracted out pension scheme and your forecast will show a COPE amount of at least £35, likely a lot more.  You are in the fortunate situation that there is no panic as pre 2016 contributions will not add to your pension amount although paying after April is going to be more expensive.  £5717 seems a bit low for what you need to buy as that works out at around £700 x 8. 

What exactly does your pension forecast show ?

Current amount accrued up to April 2022 (just confirming that is the £144.33)
Any COPE amount shown
Years which show not full and prices

Buying gap years is very good value but you need to be very careful as I mentioned above pre 2016 years will not add to the pension.

p00hsticks

You're under transitional rules - it sounds like you've been contracted out prior to 2016 (do you have an private pension from the company you worked for ?) and so your' 'starting amount' in April 2016, which was the higher of the two amounts you were entitled to under the old and new rules, was that under the old rules.

The old state pension rules only took into account a maximum of 30 years, and the basic pension under those rules is now £141.85 - more or less what you have as your forecast (it sounds like you have a little bit of additional pension with it).  AS you already had more than 30 years when the new state pension was introduced, buying more prior to 2016 won't increase your forecast. (see posts from xylophone if you want the full calculations under old and new rules)

Every year since April 2016 would currently add £5.29 to your forecast amount until you reach the maximum. £185.15
In your case youds need 8 years - the first 7 would increase your pension by 7x5.29 = £37.03 and the eighth would give you the final £3.59 to take you up to the maximum. 

The year 2016-17 won't be available to buy after April, and you'd have to brave the phone lines to buy it before the deadline. 
2017-18 through to 2022-23 will be, although the price of all but the last two will increase.  

You're potentially one of the winners here - paying a lower rate of NI due to being contracted out throughout your working life, which only earned you a basic state pension under the old rules, but now with enough time to boost it by another £40 a week under the new rules....

squirrelpie

p00hsticks said:

The year 2016-17 won't be available to buy after April, and you'd have to brave the phone lines to buy it before the deadline. 
2017-18 through to 2022-23 will be, although the price of all but the last two will increase.

You don't have to brave the phone lines if you know exactly what you want to buy. Instead write a cheque and send it with a letter saying which years you want to buy, as well as your NI number and name and address. Send it recorded delivery.

Dazed_and_C0nfused

martinCallicott said:

• 39 years of full contributions, from 1976 to 2014
• 3 years to contribute before 5 April 2025
• 8 years when you did not contribute enough

I worked for the same company from 1976 to 2014, 38 years, (but national insurance says 39.) i retired at 54 in 2014 and will get my state pension in sep 2025.(aged 66)
My state pension forecast is £144.33, but could get the new state pension of 185.15 if i buy more state pension years from 2014 to 2023 at a cost of 5717.40.
which is an average of £800 pound per year for an additional £275 a year pension.
i was told my state pension forecast of 144.33 is because i only payed into the basic state pension. and the higher rate after 2016, i will have to pay this extra for is the additional years from 2014 to 2023.
but that will be 48 years of contribution, this cant be right.
does any one know if this is correct.
Martin C

It will be and you are a big winner under the new system.

Your £5,717.40 is buying additional State Pension of £40.82/week.  Which is £2,122/year (pre tax).

If you could buy annual pension of £2,122 commercially for a one off outlay of £5,717.40 there would be queues down the street!

Or would you prefer the old system to have remained in place and you could keep your £144.33/week?  

At the end of the day if you are happy with £144.33 you don't have to make any voluntary contributions.  It's your choice.

xylophone

I worked for the same company from 1976 to 2014, 38 years, (but national insurance says 39.) i retired at 54 in 2014 

i was told my state pension forecast of 144.33 is because i only payed into the basic state pension. and the higher rate after 2016,

You were a member of a "contracted out" pension scheme.

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 (b) and had a number of years to go before you reached state pension age.

It is possible for you to improve your forecast up to (but not in excess of) a full NSP by making voluntary contributions for the requisite number of years  from 6/4/16.

 

ChocolateWombat

I watched the Martin Lewis show this week about boosting state pension.

One thing he said was that sometimes people don’t need to buy full years, as they are short of contributions for a full year, but have made some and just need to top up to reach the required amount.

He pointed out that simply seeing how many years you’re short, and buying those can cost more than needed.  There is a government pension help organisation (forget the name now) that you can ring and they will tell you exactly how much you’re short and how much you can pay to get the full state pension.  For many people it won’t be the cost of however many full years you’re missing.

I expect someone could name the organisation.  It could certainly save a few quid which you simply do t need to pay.  There’s a deadline coming up in April to reclaim more years than you normally can.

Dazed_and_C0nfused

ChocolateWombat said:

I watched the Martin Lewis show this week about boosting state pension.

One thing he said was that sometimes people don’t need to buy full years, as they are short of contributions for a full year, but have made some and just need to top up to reach the required amount.

He pointed out that simply seeing how many years you’re short, and buying those can cost more than needed.  There is a government pension help organisation (forget the name now) that you can ring and they will tell you exactly how much you’re short and how much you can pay to get the full state pension.  For many people it won’t be the cost of however many full years you’re missing.

I expect someone could name the organisation.  It could certainly save a few quid which you simply do t need to pay.  There’s a deadline coming up in April to reclaim more years than you normally can.

I'm sure it already shows that on your NI record, available via your Personal Tax Account.

No need for a third party to be involved.

p00hsticks

ChocolateWombat said:

I expect someone could name the organisation. 

I suspect he was referring to the Future Pension Centre - now completely overwhelmed and not taking calls until after April. 

People can access their individual State Pension Forecast and NI records online if they have a /government Gateway / personal tax account and if they are unsure of whether it is worth paying can post up the details on this board to get pointed in the right direction.