Just received 1st state pension

judithann60

My husband has just received his first state pension payment. However he has been deducted just over £15 a week by having contributed to a private pension which unknowingly to us was due to contracting out. However, on the Government gateway it states that he has paid 48 years NI contributions in full. My thoughts are why wasn't he given the option to top up his contributions? Also, he has paid 13 years of NI above the required time, what happens to those years and why can't they be taken into account? A case of working people being penalised.

sevenhills

Did he check to see if his NI or state pension amount could be added to before his retirement?
It could be that the COPE amount did not affect his pension, how much is he getting?

judithann60

Didn't think we needed to as it specified 48 full years on Gov.UK, which technically isn't true.£188.69 a week.

molerat

A simple case of not understanding how it works, the total number of years is not relevant to those under the transitional arrangements. 

He is receiving no less than he had earned under the old scheme and anything he has paid since 2016 has added to that amount. 

Has he got any gap years in his NI record since 2016 ?

If so it will be possible to purchase voluntary NI to fill those gaps.

judithann60

Yes I agree, but still think that it shouldn't say "full  years" when it's not. No gaps, but half a year when he retired from working which would have been year 49.

molerat

judithann60 said:

Yes I agree, but still think that it shouldn't say "full  years" when it's not. No gaps, but half a year when he retired from working which would have been year 49.

They are full years though for basic pension purposes.  I find it hard to believe he is £15 short with maybe 7 post 2016 years.  Do you have access to his on line tax account ?  When did he stop working ?

mebu60

The system changed back in 2016, your husband would have received all the relevant information back then. I was way over on the old system but six years short on the new 'flat rate' system due to having been contracted out. Can't say I was happy about that but it was all explained and I have paid six years of voluntary NI contributions since then to qualify for a full state pension (again!) next year. The new system is definitely better. There will always be winners and losers in any transition. Unfortunately. But it was widely publicised at the time. 

af1963

"full year" means a year that had enough NI payments to qualify .  Not the same as "a year where he paid the full rate of NI". In many of these years before 2016, he was paying a reduced rate of NI - which would have only entitled him to the (lower) old-style basic pension.  He's now entitled to quite a bit more than that.  So he's one of the winners from the new system.

The widely quoted "35 years for a full pension" only applies to people whose entire working life is after 2016.

pinnks

I always struggle to understand when people say they are not happy with their lot because they don't have the new flat-rate max having been contracted out, paying less NI and accruing a workplace pension.

The transitional rules ensure you are not worse off than you would have been had the system not changed.  For a contracted out person, that essentially means the full old state pension based on a max of 30 of your 50 or so contribution years.  The new system now allows you to increase that by paying more into the system.  If you are working you would pay it anyway and under the old rules would not have increased your pension; if you are no longer working you can pay voluntarily.

Seems pretty fair to me, even though, like many reaching state pension age in the first decade of the new rules, I run out of time to max out on that generous ability to increase my pension above what I thought I would ever get until the 2016 changes came along!

Dazed_and_C0nfused

pinnks said:

I always struggle to understand when people say they are not happy with their lot because they don't have the new flat-rate max having been contracted out, paying less NI and accruing a workplace pension.

The transitional rules ensure you are not worse off than you would have been had the system not changed.  For a contracted out person, that essentially means the full old state pension based on a max of 30 of your 50 or so contribution years.  The new system now allows you to increase that by paying more into the system.  If you are working you would pay it anyway and under the old rules would not have increased your pension; if you are no longer working you can pay voluntarily.

Seems pretty fair to me, even though, like many reaching state pension age in the first decade of the new rules, I run out of time to max out on that generous ability to increase my pension above what I thought I would ever get until the 2016 changes came along!

Sadly if someone doesn't understand the new system it's much more likely they'll be unhappy despite being better off than they would be under the old system.

pinnks

Agree 100%