State Pension forecast accuracy

geordiejon

molerat said:

From the figures given your April 2016 starting amount was £130.98 under the old rules, £119.30 + £11.68 S2P, or £151.20 minus COPE under the new. The April 2022 amount shown means the old rules was higher and that 2016 amount is valued at £171.51 today leaving £32.34 or 5.6, so 6 full, post 2016 years needed to reach the maximum.  You already have 5 so only 1 more needed and if you are still working that will be 2022-23.

hi, just a question for you as you seem very good at answering pension questions.
we looked at my wifes forcast who is 60 and hasn't missed a year since 1979, they said she had reached her maximum
forcast but gave the figure as £219.25 per week which is £15.40 above the usual ammount.
was just wondering how they calculate that and has anyone else seen their rates higher.

GunJack

geordiejon said:

molerat said:

From the figures given your April 2016 starting amount was £130.98 under the old rules, £119.30 + £11.68 S2P, or £151.20 minus COPE under the new. The April 2022 amount shown means the old rules was higher and that 2016 amount is valued at £171.51 today leaving £32.34 or 5.6, so 6 full, post 2016 years needed to reach the maximum.  You already have 5 so only 1 more needed and if you are still working that will be 2022-23.

hi, just a question for you as you seem very good at answering pension questions.
we looked at my wifes forcast who is 60 and hasn't missed a year since 1979, they said she had reached her maximum
forcast but gave the figure as £219.25 per week which is £15.40 above the usual ammount.
was just wondering how they calculate that and has anyone else seen their rates higher.

The extra over the newSP of £185-odd will be down to her not being contracted out and therefore been earning SERPS/S2P which was the state pension's earnings related element over & above the old basic state pension. Old SP could be up to around £300 a week if you were always contracted-in to SERPS/S2P and were a higher earner.

xylophone

forcast but gave the figure as £219.25 per week which is £15.40 above the usual ammount.

At 6/4/16, the calculation for her "starting amount" under old rules was

(NI qualifying years/30 (max) x £119.30) + (Additional State Pension - (if applicable) Deduction for Contracting Out)

Under new rules was

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

Her starting amount was the higher of the two and was more than a full new state pension.

The amount above the full NSP is her "protected payment".

If she was under SPA. working and earning the relevant amount, she would have continued to be required to pay NI although it would not have improved her forecast.

That part of her starting amount equivalent to new NSP has been indexed under the triple (double) lock rules while the protected payment has been indexed by CPI.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf   was produced by the Government as a guide to NSP in the run up to its introduction.

geordiejon

cheers for that, understood.

OliverTw

I'm also trying to get my head around my State Pension Summary and would appreciate some help to understand the figures below and how buying additional years NI years could maximise the State Pension I would receive when I reach 66 in June 2024.

Many thanks

Current amount accrued up to April 2022 = £170.04 - based on forecast today
Number of pre 2016 NI years full = 34
Number of post 2016 NI years full = 0
Tax year I reach state retirement = 2024/5
Any COPE amount shown = £72.10

Dazed_and_C0nfused

OliverTw said:

I'm also trying to get my head around my State Pension Summary and would appreciate some help to understand the figures below and how buying additional years NI years could maximise the State Pension I would receive when I reach 66 in June 2024.

Many thanks

Current amount accrued up to April 2022 = £170.04 - based on forecast today
Number of pre 2016 NI years full = 34
Number of post 2016 NI years full = 0
Tax year I reach state retirement = 2024/5
Any COPE amount shown = £72.10

You need to add 6 post 2016 years to reach £203.85.

The first five will take you to £199.16.

The sixth will add the final £4.69.

Well worth spending the money.

Annual increase of £1,758 for ~£5k is a no brainer.  Even if you had to effectively pay higher rate tax on the extra you'd be in profit after 5 years.

p00hsticks

RL11 said:
The basic pension ought to be paid for 35 years, whether contracted out or not. 

The basic state pension will be paid for 35 years - in fact, it will be paid for 30, as that was all that as required under the old rules, and if you were contracted out then your 'starting amount' would most likely be that under the old rules.

But the basic state pension is only £156.20 a week, lower than the maximum new State Pension of £203.85 

Earth_Rocker

I don't want any nasty surprises, so I'm a little nervous of not getting full SP when the time comes.
My forecast says I will receive the full amount, but is that only if I work until 67?

I started work in 1985 and have full years contributions since then. 39 years.
I have a COPE amount of £43.79.
I plan to retire in July 2029 aged 60.

Will I be able to, or will I have to pay class 2 contributions in my early retirement? 

Thanks in advance.

Dazed_and_C0nfused

Earth_Rocker said:

I don't want any nasty surprises, so I'm a little nervous of not getting full SP when the time comes.
My forecast says I will receive the full amount, but is that only if I work until 67?

I started work in 1985 and have full years contributions since then. 39 years.
I have a COPE amount of £43.79.
I plan to retire in July 2029 aged 60.

Will I be able to, or will I have to pay class 2 contributions in my early retirement? 

Thanks in advance.

Difficult for anyone to say given you haven't told us what you current entitlement is.

But I suspect that given you are under transitional rules and have that many pre and post 2016 years you will comfortably achieve the standard new State Pension by 2029, if not already.

Voluntary NI is highly unlikely to be necessary.

But why not read your forecast (in full, not just the headline figure) and then you will know the facts.

eskbanker

Earth_Rocker said:

I don't want any nasty surprises, so I'm a little nervous of not getting full SP when the time comes.
My forecast says I will receive the full amount, but is that only if I work until 67?

I started work in 1985 and have full years contributions since then. 39 years.
I have a COPE amount of £43.79.
I plan to retire in July 2029 aged 60.

Will I be able to, or will I have to pay class 2 contributions in my early retirement? 

Thanks in advance.

You need to look at the section of the forecast highlighting how much you've earned up to April 2024 (or 2023), and also whether there's any reference to not being able to improve your forecast anymore.