Checking NI record and possible missing HRP. Old State pension, claimed from 2008.

FIREmenow

Hi Everyone,

I've recently discovered that my mum might not be getting the maximum state pension, so I've been looking into this with my parents.  They had assumed this was her maximum because 'men get more'.  She will get £186.79 per week from April. Apart from whether it is correct, we want to also calculate the financial situation for each survivor if one of them died. My dad has full new state pension since turning 65 in 2021.

I have decent knowledge when it comes to my own pension and rules that apply to me, and feel ok with the calculations for the many threads on here for those who are under transitional rules and can still buy qualifying years under the new state pension, but struggling to find good info for old state pension, seems to be buried under more popular search hits about the urgency of buying qualifying years. Can anyone help me figure this out please?

She has worked most of her life, with some gaps whilst children were young, and has been claiming state pension since she turned 60 in mid 2008.  She continued to work part-time until mid 2012.  She has two small DB pensions, one is finaly salary which she left in 1984 - I haven't seem much paperwork on this one, and one is LGPS from late 1990s, to 2012, when she fully retired and drew that one, it has a GMP, and likely (certainly?) was contracted out as public sector.

Her State Pension Summary on Government Gateway is blank because she retired before 2016.

Her NI record says that she has 35 full years, and 9 incomplete years -these 9 are all in the 80/90s when her children were under 16.  A couple of early ones have some weeks of NI credits, perhaps maternity related, but not enough, most are totally blank  I think that she should have Home Responsibilities Protection for these years, which might have added to her pension.  Child benefit was paid to her.  Did being a higher earner impact HRP and NI years back then?  My mum certainly wasn't one and I think it was unlikely my dad was at that age, but I can check if it's relevant.

The article also says that HRP was recorded differently pre-2010 so might not show on the NI record - but would a year show as not full (as it does in her case) or show as full but just not give the reason as being HRP? Basically, if her NI record says 35 full years, can we trust that this was the basis for the pension calculation?

My parents were married after 1975, so married woman's stamp shouldn't be causing an exemption.  This is her second marriage, and the first one may have been partly pre-1975 when married woman's stamp stopped, so could have continued to apply after the rules changed.  Would this have been stopped automatically when they divorced?  Wondering if there is any possibility this continued and carried over past 1975 but seems a stretch.  The Steve Webb article below seems like it is a similar situation to that scenario, but it seems unlikely here, and I expect she would have had a two-year break in employment in the 80s that would have reset that if it were the case (speculation though).

I have a letter for the state pension caluation for Apr 2013 and she has basic state pension, pre-97 additional state pension that seems to be cancelled out by a higher COD amount (I guess from being contracted out whilst in LGPS), then some post-97 additional state pension and GRB added on.  I've no idea how to check what all this means - is there somewhere else on the Gov Gateway platform where we can see what her state pension amount is made up of - my parents might have paperwork on this, but I haven't seen it apart from this letter from 2013.

Many thanks in advance for any help unravelling this.

Articles I was looking at:

https://www.lcp.com/mothers-missing-millions

https://www.thisismoney.co.uk/money/pensions/article-12444931/Married-womens-stamp-state-pension.html

Rodders53

£186.79
That's likely to be the correct full basic state pension with some Additional state pension on top (serps etc.,.).

https://www.gov.uk/state-pension/how-much-you-get

I will get £170.93 from April with a very little additional (currently £157.52).  I'm male. In 2006 one needed 30 full years to max out the basic State Pension.

p00hsticks

The 'core' basic state pension amount for those retiring under the old scheme will go up to £169.50 from April, so she is receiving more than that - the extra is presumably the 'additional state pension(SERPS or S2P) she got from being in a 'contacted in' employment at some point that you say was mentioned in the 2013 letter. .

I think the annual letter from DWP telling her about the rise should break down how her amount is made up. She should have received one recently so I suggest your starting point is to get her to share the info with you. 

Prior to 2010, I believe that HRP was applied by reducing the number of NI years needed to qualify for a state pension rather than giving credits. (When it was removed in 2010 this reduction was converted into credits for the relevant years for those still to reach State Pension Age). As your mother reached SPA prior to 2010 then as a starting point she would have required 39 years to get the full 'basic' amount.    I'm not sure how you would find out directly what reduction (if any) was applied to this figure for HRP although if the above letter says how much the basic amount she is receiving is you should be able to work it out. 

AS your father reached SPA after April 2016, then If your father does not have a 'protected payment' over and above the maximum new State Pension amount (currently £203.85) then on his death your mother would not inherit any of his state pension. As your mother reached SPA under the old scheme then he may be eligible to something if she dies first, but I'm not sure how much - it may only be a proportion of that additonal amount she has acquired. 
Have you  seen this ?
The new State Pension: Inheriting or increasing State Pension from a spouse or civil partner - GOV.UK (www.gov.uk)

badmemory

I already have my letter which is dated 17th February & turned 60 two years before her so as poohsticks says the top line should be 169.50 with the further lines (I have 5) detailing the value of the other parts.

xylophone

All HRP did was to reduce the number of years required to be eligible for a full Basic State Pension.

Your mother reached SPA under the old scheme and pre 2010 so without HRP, would have required 39 qualifying years to be eligible for a full Basic.

https://www.gov.uk/home-responsibilities-protection-hrp

She would have reached working age in the mid sixties - between 1961 and 1975, there was an early form of earnings related  additional state pension   accrued on top of the Basic State Pension  (Graduated Retirement Benefit)  - it  was accrued by employed persons of 18  and over  and at different rates for men and women.

Even for a man who had accrued the maximum number of units, this would currently amount to only around £12 a week.

In 1978, the State Earnings Related Pension Scheme was introduced - employers and employees paid higher national insurance contributions so that employees would accrue additional  state pension on top of the Basic State Pension.

Employers offering salary related pension schemes usually contracted out of SERPS but in return had to guarantee a pension at least as great as the employees would have earned had they remained contracted in. This was the Guaranteed Minimum Pension and forms part of the occupational pension.

The GMP scheme ended in 1997 but employers offering a COSR scheme had to comply with the reference scheme test regarding  the level of benefits provided by the scheme.

Contracting out for DB Schemes ended in 2016 with the introduction of the NSP.

From 2002 when SERPS was replaced by S2P, it was possible even for those who were contracted out to accrue some  additional state pension if they were only on a moderate salary.

Your mother should have a  DWP letter for 23/24 showing her current situation - if she hasn't had it already, one for 24/25 should be with her soon.

As she was contracted out before 6/4/1997, she will have accrued a Guaranteed Minimum Pension and therefore ther will be a Contracted Out Deduction shown on her state pension statement.

In this connection, see https://researchbriefings.files.parliament.uk/documents/SN02674/SN02674.pdf


Basic State Pension  £.............


Pre 97 Additional State Pension £.......

less Contracted Out Deduction of £.........

Total payable    £.........

Post 1997 Additional State Pension  £........

Graduated Retirement Benefit £........

Total Amount each week is £......

if the amount for BSP in her 2023/4 letter is £156.20, then she is receiving  the  full current Basic State Pension  - the figure for 2008/9 was  £90. 70 a week.

If she is receiving a full basic, then she is receiving her full entitlement.

With regard to  entitlement should she predecease her husband/other way round,  see page  8 onwards here (noting that NSP ("single tier") started in 2016 not 2017).

https://assets.publishing.service.gov.uk/media/5a758e27e5274a6faebebd94/derived-inherited-entitlement.pdf

FIREmenow

Thanks everyone, I really appreciate your responses.

I've asked them to send me a pic of the latest letter about state pension next year when they have a chance.

Thanks in particular for the explanation of how HRP was applied - that her 35 years would have been enough if they reduced the requirement down from 39, rather than increasing her years of entitlement using credits.

As mentioned, it looks like my dad might be eligible for the additional  partif he survived my mum.  I need to check the very old final salary pension my mum has  has a survivor's pension, and there is 50% survivor's pension from her LGPS. So my dad will have more than his current pensions.

My mum who is older but also from a very-long-living family, will potentially not receive anything extra as I think my dad's only other income is an annuity that is not very good.  I'm speaking to him about putting £2880 pa into a SIPP for the £180 extra after tax, with this being tax-free if my mum inherits it before he is 75.  Their current fallback is that my mum will have to sell their house and rent somewhere if she can't afford the bills, but I am hoping it wont come to that and that she doesn't have to have that worry rumbling away in the background.

xylophone

I've asked them to send me a pic of the latest letter about state pension next year when they have a chance.

Full Basic for 24/25 will be £169.50.

Full NSP for 24/25 will be £221.20.     If your father has had a full working life of forty plus years and was never contracted out, it is quite possible that he has a "protected payment" on top of the full NSP - what does his statement of benefits show?

FIREmenow

xylophone said:

I've asked them to send me a pic of the latest letter about state pension next year when they have a chance.

Full Basic for 24/25 will be £169.50.

Full NSP for 24/25 will be £221.20.     If your father has had a full working life of forty plus years and was never contracted out, it is quite possible that he has a "protected payment" on top of the full NSP - what does his statement of benefits show?

Thanks xylophone, I'll get to the bottom of it for both of them when they send me the latest letters and report back. They've given me a jumble of figures where it's not clear whether it is their total pension income, or just state pension.

badmemory

£720 added to the SIPP for £2880.

FIREmenow

badmemory said:

£720 added to the SIPP for £2880.

Agreed, and total gain is reduced to £180 after basic rate tax at drawdown.

xylophone

With regard to the DB Scheme that your mother left in 1984, are you indicating that it was not a contracted out scheme?

This is possible - (we've seen a handful of references on the forum to such schemes) but it is unlikely.

Does your mother's annual statement from this scheme show pre 88 GMP and excess?