State Pension forecast - quick question

molerat

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

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

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

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

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

a 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

It’s a subtle hint from HMRC to retire. No point paying any more NI, so stop.

Suzycoll

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

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?

Suzycoll

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

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?