Another SERPS question re my state pension.

Xenon123

Hi all. I've had a quick look around before posting, but can't see any definitive answers to my question.

I retired early at 57 and I can claim my state pension in 2032.
Upon checking the HMRC site re my State Pension, it confirms I have a record of 42 years full National Insurance contributions, and I am projected to get the full state pension of £221.20per week.
I paid NI up until 2023 and from 1981.
However in the late 80's like most, I contracted out of SERPS.  I am not sure when I was contracted back in again.
My question. Is that £221.20 pw forecast by HMRC factoring in my opted out years, or will an adjustment be made to that figure.  If so, how can I estimate what that adjustment might be?  Is there anyway I can check?  I cannot improve my forecast any more.

Many thanks,

https://imgur.com/a/Kr1C9Cx

eskbanker

Xenon123 said:

My question. Is that £221.20 pw forecast by HMRC factoring in my opted out years, or will an adjustment be made to that figure.

The forecast figure already takes account of being contracted out (not opted out btw), so there isn't a subsequent deduction for that.

Xenon123

Terrific thanks.

I've just been reading one of the links on the site

If you reached State Pension age on or after 6 April 2016

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.

Why does it state that if they have already taken the fact that I was opted out into their forecast calculation of £221.20 pw?

Sarahspangles

Xenon123 said:

Why does it state that if they have already taken the fact that I was opted out into their forecast calculation of £221.20 pw?

Because some people compare with spouses or friends and see they are forecast to receive a lower pension. They then need to understand that they contracted out and may receive some pension from another source.

xylophone

At 6/4/16, (at which time contracting out ended completely), two calculations were done to establish your starting amount for

NSP .

It was the higher of

Old Rules

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

New Rules

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


You would have been in one of three positions.

(a) Starting Amount equal to a Full NSP (£155.65 at that time).

(b) Starting Amount more than a Full NSP (£155.65 at that time).

(c) Starting Amount less than a Full NSP (£155.65 at that time).


In the case of  (a), while if under SPA and earning the relevant  amount you would still pay or be credited with NI contributions, this would

not improve your  starting amount which would just increase each year under the triple (double) lock.


In the case of (b), while if under SPA and earning the relevant  amount you would still pay or be credited with NI contributions, this would

not improve your starting amount.  The portion equivalent to full NSP would increase under the triple (double) lock while the balance

("protected payment") would increase by CPI.


In the case of (c) while under SPA and earning the relevant amount, your  NI contributions/ credits from 6/4/16 onwards would improve

your Starting Amount up to but not in excess of a full NSP. 


Given your age and the fact that you were contracted out for a number of years, it is likely that you were in position (c).