State Pension Different Rates

Keniff13

Just a quicky everyone. I have received my state pension forecast which is approx £221/week and that this is the max I can receive. I have full contributions. However, a couple of friends of mine of similar age have a forecast of approx £253/week. I thought the difference was because I was opted out of SERPS back in the day. However they are in the same position. Can someone explain why there is a difference? My understanding was that £221 was the current max????? Ta

p00hsticks

Keniff13 said:

I thought the difference was because I was opted out of SERPS back in the day. However they are in the same position. Can someone explain why there is a difference? My understanding was that £221 was the current max????? Ta

I'd say that they can't be in exactly the same position - they must have been contracted (not 'opted') in to SERPS/S2P for a period of their working lives in order to build up that extra amount, which is known as a protected payment. 

Basically, when the new State Pension was introduced in 2016, everyone's individual entitlement under both the old and new rules was calculated depending on their specific record, and the higher of the two amounts became their 'starting amount'. If that amount was higher than the new State Pension maximum, then the surplus became a  'protected payment'. 

  

xylophone

• At 6/4/16,  people's NI records were examined and  individual calculations were done  for all those under state pension age to
  
  establish their individual "starting (foundation) amount" for New State Pension - it was the higher of
  
  Old Rules
  
  NI qualifying (full) years (max 30)/30 x Full Basic State Pension (£119.30) + (Additional State Pension - (if applicable) Deduction for Contracting Out)
  
  New Rules
  
  {NI qualifying (full) years (max 35)/35 x Full New State Pension (£155.65)}  - (if applicable) Contracted Out Pension Equivalent.
  
  
  People were in one of three positions
  
  (a) Starting amount equal to NSP.
  
  (b) Starting amount greater than NSP.
  
  (c) Starting amount less than NSP.
  
  
  People in (a) or (b) could not improve their starting amount.  It would go up each year under the rules relating to State Pension increases.
  
  
  Those in position (c)  had the possibility (depending on circumstances) of improving  their starting amounts up to (but not in excess of )
  
  a full NSP  by NI contributions or credits. 
  
  
  You were in either (a) or (c).
  
  You have  reached full NSP so while (if working and earning the relevant amount) you will continue to pay NI up to SPA, this will not
  
  increase your NSP.
  
  It will go up each year under the rules relating to SP increase.
  
  
  Below is the guide published by the Government back in 2013 to explain the new system
  
  
  https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf