Getting Full State Pension by buying years

molerat

Morpheus999 said:

Hi Molerat
I have been told to put it in writing to 'Individual Caseworker PT Operations North East' so that is what I will do.

May I ask where the calculation can be found to work out the pension in my case?  I tried, for interest, adding the full pre 2016 pension to 5/35 of the new pension but didn't get £203.61

Again, I am very grateful for your help and support.

Your current £197.79 + £5.82 = £203.61

Your 2016 starting amount was £133.26, the higher of your old or new scheme calculations which is currently worth £174.49 so adding £29.12 for 5 post 2016 years = £203.61. The new scheme calculation was £119.89 and buying those additional 2 pre 2016 years took that to £128.78 which is still lower than the old scheme calculation so not improving your forecast.

It can all be worked out from your current amount, number of pre and post 2016 years and COPE.  That is why we ask for those few details.

Removing the post 2016 years from the current amount at x * £203.85 / 35 leaves the starting amount at current rates.  Stripping out the annual inflation increases gives the starting amount at 2016 rates.  The new calculation is a known amount, x(max 35) * £155.65 / 35 - COPE.  If that does not equal the starting amount calculated earlier then it must be the old calculation which is x(max 30) * £119.30 / 30 + S2P. We can calculate what x(max 30) * £119.30 / 30 is so the S2P, which includes a deduction for contracting out, can be assumed.

Morpheus999

Hi Molerat

Thank you so much for your reply, although I admit I will have to read it a couple of times to fully understand all of it.

Can you just confirm that contribution year 2016/17 is deemed to be post 2016 - I assume so as you said I should have 'topped up' 2016/17 for it to have the desired effect on my pension.

Thank you again for your help - it is much appreciated.

molerat

Yes, 2016-17 is post 2016 - the new pension started in April 2016 so in the 2016-17 tax year.  2015-16 is pre 2016, before the start of the new scheme.

Morpheus999

Very many thanks for the confirmation.

Kind regards

Morpheus999

Thanks to MOLERAT again for all the information back in June.
As suggested I eventually succeeded in 'unpicking' the payments made - Years 13/14 and 14/15 are now showing as 'not full years' and the monies have been transferred to 16/17 which is now showing as 'full year'
Problem now is that I was told by Future Pensions that adding 16/17 would increase my pension by £5.82 (as MOLERAT stated a while ago) BUT my latest pension forecast shows it has only increased from £197.79 to £199.44 and not £203.61 as expected.
Can MOLERAT or anyone else tell me why this has happened?
Thank you. 

Morpheus999

As an update - I managed to get through to Future Pensions again who confirmed that the current £199.44 is correct (hence buying a full year 2016/17 only yielded £1.65pw  ie current £199.44 minus previous £197.79) and to get to the near full amount of pension, I would need to buy an additional year which he said could be 2013/14 at £206.05 (or alternatively 2021/22 at £800). I challenged this as I understood that nothing counts before 2016 if you have 30 or more years counting. He was insistent to get to £203.61 I would have to buy 2013/2014 !!
I am very confused as this is contrary to MOLERATs advice that 2013/14 does not count towards my pension as I have over 30 years pre 2016.
Please advise!

GrubbyGirl_2

I think you've been given duff advice about buying the 2012/14 year.  I'd be tempted to call back and speak to someone else.  If they say the same ask them to out it in writing

xylophone

See  the chart on p6 of https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf


Your "starting amount" at 6/4/16 (inception of NSP) was the higher of

Old Rules

NI Qualifying Years/30 (max)/£119.30 (Full Basic) + (Additional State Pension - Deduction for Contracting Out).


New Rules

{NIQY/35 (max)/£155.65 (Full NSP)} - Contracted Out Pension Equivalent.

How many QY did you have at 6/4/16?

Was your starting amount based on the old or new system?

If you had at least 30 QY at 6/4/16 and your SA was less than a full NSP and based on the Old System, then only QY from 6/4/16 onwards could improve your pension up to (but not in excess of) the full NSP.

molerat

I am as confused as you on this.  

Buying a post 2016 year must add £5.82 to your 2016 starting amount so something they have done has reduced that starting amount.

FPC can only go by what is shown on their screen so as far as they are concerned it is correct.  HMRC are the ones that carry out the allocation of money to years so you need to find out exactly what they did in this last exercise.

Morpheus999

Thank you for your advice.
I have spoken to them a second time today and the agent (Omar) said he would recheck the details. After about 5 minutes, he said that he has taken advice from his senior and the rules where pensions are before and after 2016 including the complication of 'contracted out' pension is not rigid (his words not mine). In the ultimate, he assures me that reinstating the payment for 2013/4 to make that a full year will make the pension up from the current £199.44 to £203.61 (very close to the max of £203.85).