Unexpected Pension forecast change

sad12

Hoping for some advice on whether this is normal.

I retired in 2014, age 55 years and have lived off my teachers pension. I have not worked since then. I've checked my State pension forecast regularly online since I retired and it has always said my forecast was the current full state pension, I have 39 qualifying years and I cannot improve on my forecast any more. I am 66 in June this year.

However, when I checked it this year, it initially said my forecast was unavailable and a few weeks later it said to get the current full state pension of £221.20 I'd have to buy 8 years voluntary NI contributions from 2016-2024 at a cost of £6624.

Is it normal for the forecast to be so far out for the last 10 years? Shouldn't my forecasted pension have been reduced each year so I'd be able to top it up over ten years rather than having to find a lump sum?

I've been in touch with the future pension centre twice so far, and each time their team leader was supposed to call back, but hasn't.

Any advice gratefully received.

molerat

It's most unusual for this to happen.  I highly suspect there has been an error recording your contracted out history and this has now come to light whilst reconciling your records prior to receiving the pension.  This new forecast will most likely be correct as there would be no way you would be entitled to the full pension with no post 2016 contributions.

sad12

molerat said:

It's most unusual for this to happen.  I highly suspect there has been an error recording your contracted out history and this has now come to light whilst reconciling your records prior to receiving the pension.  This new forecast will most likely be correct as there would be no way you would be entitled to the full pension with no post 2016 contributions.

Thanks for the reply, luckily this was sorted before 5th April, just an unexpected expense, but I'll have a moan at them anyway.

Thanks again

pinnks

You are of a similar vintage to me, so given that all of you 39 years would, I think, relate to years before 6 April 2016, it seems your starting amount for the new state pension will have been based on the old rules and be at, or about, £169.50 (the old rules maximum and based on a maximum of 30 NI years).

If that is the case, you need 9 more years to hit the new maximum, so as you need 8, it would seem you have a small amount of additional pension tucked away in your starting amount too.  Have you checked how much the 8th year will add?.   

sad12

pinnks said:

You are of a similar vintage to me, so given that all of you 39 years would, I think, relate to years before 6 April 2016, it seems your starting amount for the new state pension will have been based on the old rules and be at, or about, £169.50 (the old rules maximum and based on a maximum of 30 NI years).

If that is the case, you need 9 more years to hit the new maximum, so as you need 8, it would seem you have a small amount of additional pension tucked away in your starting amount too.  Have you checked how much the 8th year will add?.   

Each year adds between £5-6 per week from 2016/17 to 2023/24 raising the weekly amount from £177.27 to £221.20. I only had one year when I didn’t pay NI from 1975 to 2015. I’d always assumed the forecast was correct as I had a military pension which I transferred to the teachers pension and didn’t realise that the military one was opted out as well. A good reason for everyone to have an understanding of how the State pension system works I suppose.

molerat

Each year will add £6.32 to the weekly pension with the final year likely adding a smaller amount taking you to the full pension amount

sad12

molerat said:

Each year will add £6.32 to the weekly pension with the final year likely adding a smaller amount taking you to the full pension amount

You're exactly right when I got the calculator out. £6.32 for each year except the last at £6.01.

pinnks

sad12 said:

pinnks said:

You are of a similar vintage to me, so given that all of you 39 years would, I think, relate to years before 6 April 2016, it seems your starting amount for the new state pension will have been based on the old rules and be at, or about, £169.50 (the old rules maximum and based on a maximum of 30 NI years).

If that is the case, you need 9 more years to hit the new maximum, so as you need 8, it would seem you have a small amount of additional pension tucked away in your starting amount too.  Have you checked how much the 8th year will add?.   

Each year adds between £5-6 per week from 2016/17 to 2023/24 raising the weekly amount from £177.27 to £221.20. I only had one year when I didn’t pay NI from 1975 to 2015. I’d always assumed the forecast was correct as I had a military pension which I transferred to the teachers pension and didn’t realise that the military one was opted out as well. A good reason for everyone to have an understanding of how the State pension system works I suppose.

The point I was seeking to make is that as the old rules will almost certainly apply to the calculation of your starting amount in 2016, only 30 of your 39 years to that point have any impact on your pension.  I am not sure what the £177.27 is but if that is the amount based on your currently-paid years, it would indicate that you do have some additional pension (£177.27 - £169.50) in your starting amount, but would then need only 7 years to reach the new state pension maximum.