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State Pension forecast - quick question

124

Comments

  • molerat
    molerat Posts: 35,055 Forumite
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    grimsalve said:
    molerat said:

    No effect but if you know you have been contracted out then it is important that statement is there as that means your forecast has taken your contracted out service into account. If you really want to know what effect your contracted out service had on your new pension calculation then click 
    here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account and that will give you the COPE figure that was used in deciding if your old rules or new rules amount was used as the starting amount in 2016 - as yours is higher than the new figure then old rules was used.



    Your COPE estimate is £25.02 a week

    This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

    In most cases the private pension scheme you were contracted out to:

    • will include an amount equal to the COPE amount
    • may not individually identify the COPE amount

    The total amount of pension paid by your workplace or personal pension schemes will depend on the scheme and on any investment choices.



    So that £25.02 was deducted from the £155.65 new pension leaving £130.63 against the old rules calculation of £161.55 which wins so that is what you get.  The transitional rules meant you would not be any worse off than you were under the old pension at the introduction of the new scheme.

  • grimsalve
    grimsalve Posts: 626 Forumite
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    Seems to get very complicated but I'm guessing this means (theoretically) I get an additional £25 per week from my private pension from when I was contracted out compared to what I would have got if I wasn't contracted out?
  • molerat
    molerat Posts: 35,055 Forumite
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    grimsalve said:
    Seems to get very complicated but I'm guessing this means (theoretically) I get an additional £25 per week from my private pension from when I was contracted out compared to what I would have got if I wasn't contracted out?
    The all important word !

  • Cobbler_tone
    Cobbler_tone Posts: 1,300 Forumite
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    Making the very simple seem complicated. You don’t need to pay anymore NI, unless you are working and you will. Either way you will get £238.16 due to contracting out, although contracting out doesn’t necessarily mean everyone will get more. I’m surprised we have got to 4 pages!
  • xylophone
    xylophone Posts: 45,752 Forumite
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    Seems to get very complicated but I'm guessing this means (theoretically) I get an additional £25 per week from my private pension from when I was contracted out compared to what I would have got if I wasn't contracted out?





    Despite the fact that you were contracted out for a period, you will still receive a  state pension that is higher than the full NSP.


    Your "starting amount"  for NSP was individually calculated on your personal  NI record.




    On 6/4/16 the following calculations were done for  you - the SA was the higher of the two. The DFCO/COPE was used once only for these calculations.

     (A) Old Rules

    NI Qualifying Years/30 (max) x Full Basic (£119.30) + (Additional State Pension - Deduction for Contracting Out)


    (B) New Rules

    {NI Qualifying Years/35 (max) x Full NSP (£155.65) } - Contracted Out Pension Equivalent.


    If  the starting amount were greater  than full NSP (as in your case) while (if under SPA and earning the relevant amount) the individual

    would be required to continue to pay NI up to SPA, he/she could not improve it - the amount equal to full NSP would increase each

    year under the pension
    indexing rules (currently triple lock) and the balance ( the "protected payment") by CPI.


    With regard to the DFCO/COPE, this represents an amount which may be payable as part of a pension accrued when you were in

    pension scheme that was contracted out of SERPS/S2P prior to inception of NSP.


    See

    https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet






  • HedgehogRulez
    HedgehogRulez Posts: 236 Forumite
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    edited 30 September at 9:09PM
    It’s a subtle hint from HMRC to retire. No point paying any more NI, so stop.
  • Suzycoll
    Suzycoll Posts: 294 Forumite
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    grimsalve said:
    I'm 58 and I've paid National Insurance for the last 40 years. I was just looking at my State Pension forecast at https://www.tax.service.gov.uk/check-your-state-pension/account

    One thing I'm not clear on. Is the forecast based on the assumption that I will continue to work and pay National Insurance from now until my 67th birthday?

    If I decided to retire early then would this mean my state pension would reduce?
    No your State Pension will not go down if your retire early. Unless (as others have said) the government decide to change the rules

    The total rip off is you still have to pay NI (if working ) even though you have enough contributions.

    This is due to past governments (all parties) raising the pension age. 

    It was previously 60 (woman) & 65 (men). Therefore the govt have had billions ££ out of us already 

    Disgusting really 😡


  • QrizB
    QrizB Posts: 19,822 Forumite
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    Suzycoll said:
    The total rip off is you still have to pay NI (if working ) even though you have enough contributions.
    NI pays for more than pensions.
    Suzycoll said:
    Disgusting really 😡
    Which bit of the NHS would you like to give up?
    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill Coop member.
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  • Suzycoll
    Suzycoll Posts: 294 Forumite
    Eighth Anniversary 100 Posts Name Dropper Combo Breaker
    QrizB said:
    Suzycoll said:
    The total rip off is you still have to pay NI (if working ) even though you have enough contributions.
    NI pays for more than pensions.
    Suzycoll said:
    Disgusting really 😡
    Which bit of the NHS would you like to give up?
    The bit between 65-67 would be nice , that would equal paying in (for me) for 49 years. I think that is enough!

    Only a small portion goes to NHS, most of it is allocated to the State pension & other 'social security' benefits. 
  • QrizB
    QrizB Posts: 19,822 Forumite
    10,000 Posts Fourth Anniversary Photogenic Name Dropper
    edited 3 October at 6:35PM
    Suzycoll said:
    Only a small portion goes to NHS, most of it is allocated to the State pension & other 'social security' benefits. 
    So you agree that the current levels of NI payments are required in order to fund SP and benefits?
    In which case, what part of the SP would you like to give up in order to pay less NI?
    You'd personally like to pay 2 years less NI, which is about 4% of your lifetime number of years. Would you be happy with 4% cut in SP to match? £480 a year less?


    N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill Coop member.
    2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 34 MWh generated, long-term average 2.6 Os.
    Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!
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