Opting out of SERPs and National insurance

Sarahspangles

p00hsticks said:

If you were contracted out before 6 April 2016, you might not get the full rate new State Pension of £221.20 a week.

An amount is taken off your new State Pension if you were contracted out. This is because either:

• you paid National Insurance contributions at a lower rate
• some of the National Insurance contributions you paid were used to contribute to a workplace or private pension

How much is taken off depends on how long you were contracted out and your earnings at the time. While you were contracted out, you were paying into your workplace or personal pension instead.

They were so close - the missing bit is to say that the State Pension forecast already takes into account the amount taken off.

kushty9

I too am glad you asked that question. I am in a similar position albeit I am now retired. I unknowingly or not thinking about it long term, opted out I think. I was in the RAF for 15 years. I have 43 years contributions but I do not qualify for full pension. I do get an RAF preserved pension. I did enquire about it a couple of years ago but didn't get much help from the person I spoke to. So I left it as it was but seeing Martins advice recently about paying for non complete years has made me look into it again. So my question is, as I have retired and already drawing my pension, am I still able to try and pay some of the missing years? I have 2 incomplete years that come to less than £100 each. And would it make any difference to my qualifying years? If it is worth trying I will sit on the end of a very long phone call to try and reach someone to speak to. If not, I will just put it to bed for good. Thanks for any help.

xylophone

opted out I think. I was in the RAF for 15 years. 

If you were a member of the Armed Forces Scheme between 1978 and 2016, you were definitely contracted out of SERPS/S2P.

If you were a member of any other defined benefit pension scheme during that time, you were almost certainly contracted out.

When exactly did you reach State Pension Age?

GunJack

Jeez, all they need to do is add/change a couple of words and it should do away with any COPE confusion...

If you were contracted out before 6 April 2016, you might not get the full rate new State Pension of £221.20 a week.

An amount is  was taken off your new State Pension 2016 Starting Amount if you were contracted out. This is because either:

• you paid National Insurance contributions at a lower rate
• some of the National Insurance contributions you paid were used to contribute to a workplace or private pension

surely this will make it obvious that any deduction was in the past?!?!?!?!?!?

af1963

The wording *is* confusing though. It says near the top "your forecast is £221.20" and then further down says "you might not get the full rate of £221.20". I can see how people who are not familiar with this can think there's a chance it will be reduced below this amount.

As the page is generated by code anyway, the later part *could* be coded to say, for anyone due to get the maximum:  "You were contracted out of SERPS for a period, but your contributions have been enough for you to still receive the full £221.20 state pension in addition to your private pension."

kushty9

xylophone said:

opted out I think. I was in the RAF for 15 years. 

If you were a member of the Armed Forces Scheme between 1978 and 2016, you were definitely contracted out of SERPS/S2P.

If you were a member of any other defined benefit pension scheme during that time, you were almost certainly contracted out.

When exactly did you reach State Pension Age?

Thanks for getting back to me, coming up 6 years ago, so 2018. I was in the RAF from 1973 to 1988.

xylophone

Thanks for getting back to me, coming up 6 years ago, so 2018. I was in the RAF from 1973 to 1988.

See page 6 here

https://www.royallondon.com//siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf

andhttps://rfm-more.co.uk/2023/11/voluntary-national-insurance-contributions-plugging-the-gaps-in-your-ni-record/

 For the tax years from April 2006 to April 2017, the deadline for contributions is 5 April 2025. This is a further extension: the government’s original intention had been to allow contributions only until 31 July 2023. The provision particularly impacts men born after 5 April 1951, or women born after 5 April 1953, for whom retirement planning will be on the horizon. The new deadline gives them more time to decide whether voluntary contributions will be of benefit, and allow them to access State Pension entitlements. But it could also benefit anyone looking to make good a gap in the contributions record for the past six years.

It is virtually certain that your "starting amount" for NSP (see my previous post for calculation) was based on the old system.

Are 2016/7 and 2017/8  "qualifying (full) years"?

kushty9

xylophone said:

Thanks for getting back to me, coming up 6 years ago, so 2018. I was in the RAF from 1973 to 1988.

 For the tax years from April 2006 to April 2017, the deadline for contributions is 5 April 2025. This is a further extension: the government’s original intention had been to allow contributions only until 31 July 2023. The provision particularly impacts men born after 5 April 1951, or women born after 5 April 1953, for whom retirement planning will be on the horizon. The new deadline gives them more time to decide whether voluntary contributions will be of benefit, and allow them to access State Pension entitlements. But it could also benefit anyone looking to make good a gap in the contributions record for the past six years.

It is virtually certain that your "starting amount" for NSP (see my previous post for calculation) was based on the old system.

Are 2016/7 and 2017/8  "qualifying (full) years"?

I will try and work through that info, thanks. 2016/17 not a full year. 2017/18 was a full year.

molerat

kushty9 said:

xylophone said:

Thanks for getting back to me, coming up 6 years ago, so 2018. I was in the RAF from 1973 to 1988.

 For the tax years from April 2006 to April 2017, the deadline for contributions is 5 April 2025. This is a further extension: the government’s original intention had been to allow contributions only until 31 July 2023. The provision particularly impacts men born after 5 April 1951, or women born after 5 April 1953, for whom retirement planning will be on the horizon. The new deadline gives them more time to decide whether voluntary contributions will be of benefit, and allow them to access State Pension entitlements. But it could also benefit anyone looking to make good a gap in the contributions record for the past six years.

It is virtually certain that your "starting amount" for NSP (see my previous post for calculation) was based on the old system.

Are 2016/7 and 2017/8  "qualifying (full) years"?

I will try and work through that info, thanks. 2016/17 not a full year. 2017/18 was a full year.

2016-17 will add £6.32 to your pension.  If you decide to go with purchasing it you will need to contact the Pension Service to start the ball rolling.  It can take up to a year from point of first contact to receiving the updated pension but that will be backdated to receipt of your payment. https://www.gov.uk/contact-pension-service

kushty9

molerat said:

kushty9 said:

xylophone said:

Thanks for getting back to me, coming up 6 years ago, so 2018. I was in the RAF from 1973 to 1988.

 For the tax years from April 2006 to April 2017, the deadline for contributions is 5 April 2025. This is a further extension: the government’s original intention had been to allow contributions only until 31 July 2023. The provision particularly impacts men born after 5 April 1951, or women born after 5 April 1953, for whom retirement planning will be on the horizon. The new deadline gives them more time to decide whether voluntary contributions will be of benefit, and allow them to access State Pension entitlements. But it could also benefit anyone looking to make good a gap in the contributions record for the past six years.

It is virtually certain that your "starting amount" for NSP (see my previous post for calculation) was based on the old system.

Are 2016/7 and 2017/8  "qualifying (full) years"?

I will try and work through that info, thanks. 2016/17 not a full year. 2017/18 was a full year.

2016-17 will add £6.32 to your pension.  If you decide to go with purchasing it you will need to contact the Pension Service to start the ball rolling.  It can take up to a year from point of first contact to receiving the updated pension but that will be backdated to receipt of your payment. https://www.gov.uk/contact-pension-service

Many thanks for your help, will do that right away.