State pension forecast too high?

PhilP1903

i become eligible for my state pension in March 2025. Both my online and written forecasts state that i will receive £264.47 even allowing for the rise in April this is around £30 per week higher than the normal state pension payment. Why is it so high, i have checked it multiple times over the past year and it has not changed.

Pollycat

Move to pensions board requested

PhilP1903

I have checked with HMRC and i do not see any mention of SERPs, but i see that i have paid NI for 49 years of contributions, dont know if this eefects my final payment.

xylophone

This indicates that at inception of NSP (6/4/16), your "starting" (foundation) amount was higher than a full new state pension (£155.65), so giving you a "protected payment".

Your starting amount was the higher of

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

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

Since then, the amount representing full NSP has been increasing under the "triple (double for one year) lock" and the balance by CPI.

It would appear therefore that  in March (on your figures), your pension will comprise full NSP (£221.20) plus £43.27 PP.

Your full NSP should increase (in April) to £230.25 and your PP to £44.00, giving you £274.25 a week.

PhilP1903

xylophone said:

This indicates that at inception of NSP (6/4/16), your "starting" (foundation) amount was higher than a full new state pension (£155.65), so giving you a "protected payment".

Your starting amount was the higher of

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

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

Since then, the amount representing full NSP has been increasing under the "triple (double for one year) lock" and the balance by CPI.

It would appear therefore that  in March (on your figures), your pension will comprise full NSP (£221.20) plus £43.27 PP.

Your full NSP should increase (in April) to £230.25 and your PP to £44.00, giving you £274.25 a week.

Thanks xylophone, much appreciated, the HMRC app and site are not very helpful at explaining these differences. Cheers.

SnowMan

When the switch to the new state pension happened in 2016 everyone was given a Starting Amount which represented what they had earned under the old state pension rules. If somebody had already earned under the old rules more than the full new state pension then of £155.65pw, which could happen when they had earned a lot of additional state pension, then they kept that excess amount as an extra payment called a Protected Amount or Protected Payment. This diagram explains it

When State Pension Age (SPA) is reached, the full new State Pension of £155.65pw plus the Protected Amount plus the increases from 2016 is paid.                                              

No further State Pension could be earned after April 2016 in this scenario, but the Starting Amount has since 2016 been revalued (increased before SPA) and will be uprated (increased after SPA), as follows:                                           

The full new State Pension element of £155.65pw has increased and will increase after SPA (currently) by the triple lock of the higher of national average earnings, CPI price inflation and 2.5%. So that bit is currently £221.20pw.                          

The Protected Amount element also has increased both before and will increase after SPA in line with price inflation (CPI)

In your case it looks like the Starting Amount plus those increases detailed above have taken your current state pension entitlement up to £264.47pw, and that is more than the full new state pension of £221.20pw in your case because of the Protected Amount and the CPI increases mentioned above.                    

molerat

At April 2016 you would have had an old pension entitlement of 30 years basic at £119.30 + S2P of £69.16 = £188.46 v a new pension entitlement of 35 years at £155.65 so the old was higher and converted to £155.65 + £32.81 protected payment.