Pension forecast - very confused

Squoozy

I have just loooked at my pension forecast, which says that I have 43 years full NI contributions (3 missing years that I don't understand but don't really matter), I will get £203.85 a week, and my retirement date is November 2027, when I will be 66 years and 10 months old.

However, my husband's forecast, with a similar numner of years NI contributions, is £207.87 a week, with a retirement date in July 2025 when he is exactly 66 years old.

I don't understand the difference. Is it to do with Cope, or something else?  .

QrizB

I hope you don't mind the short version:

• Your husband was contracted-in prior to 2016 and had enough S2P etc. entitlement for their "starting amount" in 2016 to be a little bit higher than the full NSP.
• You weren't.

I imagine someone else will be able to give you the long version if you need it

molerat

You need to look more closely at your forecast, is there more than one figure mentioned or is the £203.85 in the big green box the one and only amount shown with that echoed below it and the statement "£203.85 is the most you can get, you cannot improve your forecast any more" ?

Your husband is more straightforward as his is above the maximum new pension and that amount has not increased, apart from the annual inflationary increases, since April 2016. He most likely was not contracted out but could have been for a short time, if you were contracted out there will be a statement further down the page stating that with a click link to a COPE amount.

Once in payment your pension will increase (according to current legislation) each year in line with the triple lock. Your husbands will have the first £203.85 increased with the triple lock and the remaining £4.02 with CPI so not all parts increasing the same, in 2020 for instance the main body increased by 2.5% and the remainder by 0.5% but last year both parts increased the same.  You also stand to inherit half of that additional amount.

badmemory

Squoozy said:

I don't understand the difference. Is it to do with Cope, or something else?  .

The very short answer is something else.  The only way he could have more than the £203 is because he has some SERPS. He can't add to his.

Does yours say you already have the £203 or that you need to contribute for more years?

Squoozy

Thanks for the replies. The only amount shown is £203.85/ week, £10,636.60 a year. It does say £203.85 is the most you can get and has a link to a cope amount. I’m really irritated by my husband getting more, but I guess I’ll just have to put up with it

dunstonh

Squoozy said:

Thanks for the replies. The only amount shown is £203.85/ week, £10,636.60 a year. It does say £203.85 is the most you can get and has a link to a cope amount. I’m really irritated by my husband getting more, but I guess I’ll just have to put up with it

Why are you irritated?
If you contracted out with a defined benefit scheme then you paid less NI and the occupational scheme makes up the difference.
If you contracted out with a personal pension then you have a pension value that you can spend as you wish.

If your husband was contracted in, he doesnt get that pension pot or didnt benefit from lower NI.

Suzycoll

Squoozy said:

Thanks for the replies. The only amount shown is £203.85/ week, £10,636.60 a year. It does say £203.85 is the most you can get and has a link to a cope amount. I’m really irritated by my husband getting more, but I guess I’ll just have to put up with it

squoozy
have you checked how much is in your private pension (the one where your contracted out SERPS went into ) ?

Pat38493

Squoozy said:

Thanks for the replies. The only amount shown is £203.85/ week, £10,636.60 a year. It does say £203.85 is the most you can get and has a link to a cope amount. I’m really irritated by my husband getting more, but I guess I’ll just have to put up with it

It's nothing to do with gender or anything like that - it is related to the pensions that you and your husband contributed to whilst working - to put it in overly simple terms, the extra pension that you "should" have got was transferred into your other pension and pension contributions and you paid less NI at some points in your career.

In fact if anything, if there is any gender bias in pensions it's more in favour of females as there are still some pensions where for years before a certain date, the retirement date is still considered as earlier for women for some parts of the calculations.

xylophone

my retirement date is November 2027, when I will be 66 years and 10 months old.

with a retirement date in July 2025 when he is exactly 66 years old.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/state-pension/state-pension-an-overview#:~:text=Your State Pension age depends,to 67, and eventually 68.

https://www.gov.uk/state-pension-age


With regard to your state pension amounts.

On 6/4/16 (inception of New State Pension), two calculations were done for you and for your husband in order to establish your "starting amounts" for NSP.

The starting amount was the higher of

Old Rules

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


New Rules

(NIQY/35 (max) x Full NSP) - (if applicable) Contracted Out Pension Equivalent.

In the case of your husband, his starting amount was more than a full NSP - if he was still working an earning the appropriate amount, he would still have had to pay NI (and will do up to SPA)  but it would not have improved his SP amount - this has increased with the triple/double lock in the following years.

In your case, your starting amount may not have been the full amount of NSP but would have been increased up to (but not in excess of) full NSP for qualifying years from 6/4/16.

See (produced as a  consumer guide to NSP way back then).

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

Audaxer

Squoozy said:

Thanks for the replies. The only amount shown is £203.85/ week, £10,636.60 a year. It does say £203.85 is the most you can get and has a link to a cope amount. I’m really irritated by my husband getting more, but I guess I’ll just have to put up with it

You are in a really good position in that you are at the maximum already without having to pay any additional voluntary NI contributions. I have 47 years of full contributions and still need two more years voluntary payments to get to the maximum amount, but I still feel fortunate that I am able to increase it to the maximum.

I wouldn't be irritated at all if my wife's SP forecast was more than mine, as we look at it as joint income to come in the future which will go into the same household pot.

swindiff

What I don't understand is how £203.85 a week adds up to £10,636.60 a year.  I noticed that on my forecast the other day.  £203.85 x 52 = £10,600.20, so where is the extra £36.40 coming from?