State pension calculation and HMRC calculator

cockerWalker

Hi,

This is mostly idle curiosity, but I'm hoping someone here can help me understand the basis for the UK state pension calculation.

When I go to the HMRC state pension calculator it tells me "Forecast if you contribute another 2 years before 5 April 2042 £230.25 a week". I'd qualify in 2042 based on current law (I'm 50).

When I look at my NI record it tells me I have 28 full years and 6 not full (mostly when I was a student with bits of work in the holidays).

I thought that 35 years of full contributions were needed for full pension? How can I qualify with 28 +2?

Probably doesn't make any difference as I'm likely to be working long enough to get more than enough, but am curious.

p00hsticks

cockerWalker said:

I thought that 35 years of full contributions were needed for full pension?

The 35 years only applies if your entire working life occurred after the introduction of the new State Pension (nSP) on April 6th 2016 (so roughly if you were born this century). for those of us born before then but reaching State Pension Age (SPA) after that date we fall under transitional rules.

Individual calculations were done for everyone to see what their current entitlement would be on that date under both the old and new rules and the higher of the two amounts became your 'starting amount' 

Old rules were
(Ni years up to a maximum of 30 / 30) x basic state pension amount plus any SERPS / S2P earned up to that point. 

New rules were
(NI years up to a maximum of 35 / 35) x new state pension amount  minus any COPE (Contracted Out Pension Equivalent amount). 

Every NI year credited since that date simply adds 1/35th of the nSP amount to that starting amount until you either reach the nSP maximum or the tax year in which you attain sPA, whichever comes first.

The exact detail will depend on an individual record, but broadly speaking those who were contracted in to SERPS / S2P tend to need fewer than 35 years to reach the maximum, and those who were contracted out will need more. 

singhini

The “35 years” rule is a maximum, not always what you personally need.
You have pre-2016 pension contributions and so your pension is based on a “starting amount” calculation under transitional rules.

p00hsticks

singhini said:

The “35 years” rule is a maximum, not always what you personally need.

35 is not the maximum under transitional rules (I personally needed 44 as I was contracted out for most of my working life).  

singhini

i forgot to add, there is another misunderstanding -----> that you have to "have paid something into the system before you can get a pension" -----> you don't

You could in theory work for 35 years, earn say £1,048 a month (= £12,500 a year) and you would have never paid any Income Tax or NI and your record would show 35 years of "full contributions" 

Personally i don't understand some people who sit idle not working and not claiming benefits -----> work a few days a week earning £1k a month and for the other 5 days sit in your pants playing computer games -----> more beneficial in the short, medium and long term IMHO -----> there endith the sermon!!!! 

singhini

p00hsticks said:

singhini said:

The “35 years” rule is a maximum, not always what you personally need.

35 is not the maximum under transitional rules (I personally needed 44 as I was contracted out for most of my working life).  

Read my post again bcoz i never said it was -----> i made it clear to the OP they had pre-2016 contributions

QrizB

singhini said:

p00hsticks said:

singhini said:

The “35 years” rule is a maximum, not always what you personally need.

35 is not the maximum under transitional rules (I personally needed 44 as I was contracted out for most of my working life).  

Read my post again bcoz i never said it was

I've read your post again and you definitely said:

singhini said:

The “35 years” rule is a maximum ...

That's not correct.

molerat

cockerWalker said:

Hi,

This is mostly idle curiosity, but I'm hoping someone here can help me understand the basis for the UK state pension calculation.

When I go to the HMRC state pension calculator it tells me "Forecast if you contribute another 2 years before 5 April 2042 £230.25 a week". I'd qualify in 2042 based on current law (I'm 50).

When I look at my NI record it tells me I have 28 full years and 6 not full (mostly when I was a student with bits of work in the holidays).

I thought that 35 years of full contributions were needed for full pension? How can I qualify with 28 +2?

Probably doesn't make any difference as I'm likely to be working long enough to get more than enough, but am curious.

If you really want to satisfy that idle curiosity post up the following anonymous information from your forecast and NI record and someone will tell you exactly how you arrived at your current situation

Current weekly £££.pp amount up to April 2025.
Number of full NI years 15-16 and earlier.
Number of full NI years 16-17 and later.
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click 
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account

singhini

QrizB said:

singhini said:

p00hsticks said:

singhini said:

The “35 years” rule is a maximum, not always what you personally need.

35 is not the maximum under transitional rules (I personally needed 44 as I was contracted out for most of my working life).  

Read my post again bcoz i never said it was

I've read your post again and you definitely said:

singhini said:

The “35 years” rule is a maximum ...

That's not correct.

Oh yes, your both correct -----> Apologies to you both @p00hsticks and @QrizB

Would it have been better for me to have said:

35 years is the number needed for a full new State Pension under the "new rules" only (excluding the old system before 2016)

It’s not a maximum, because:

You can have more than 35 years (it just won’t increase the pension above the full rate).

cockerWalker

molerat said:

cockerWalker said:

Hi,

This is mostly idle curiosity, but I'm hoping someone here can help me understand the basis for the UK state pension calculation.

When I go to the HMRC state pension calculator it tells me "Forecast if you contribute another 2 years before 5 April 2042 £230.25 a week". I'd qualify in 2042 based on current law (I'm 50).

When I look at my NI record it tells me I have 28 full years and 6 not full (mostly when I was a student with bits of work in the holidays).

I thought that 35 years of full contributions were needed for full pension? How can I qualify with 28 +2?

Probably doesn't make any difference as I'm likely to be working long enough to get more than enough, but am curious.

If you really want to satisfy that idle curiosity post up the following anonymous information from your forecast and NI record and someone will tell you exactly how you arrived at your current situation

Current weekly £££.pp amount up to April 2025.
Number of full NI years 15-16 and earlier.
Number of full NI years 16-17 and later.
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click 
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account

Thanks.
Never been contracted out.
2016 on - 9 years
2015 and before - 19 years

molerat

cockerWalker said:

molerat said:

cockerWalker said:

Hi,

This is mostly idle curiosity, but I'm hoping someone here can help me understand the basis for the UK state pension calculation.

When I go to the HMRC state pension calculator it tells me "Forecast if you contribute another 2 years before 5 April 2042 £230.25 a week". I'd qualify in 2042 based on current law (I'm 50).

When I look at my NI record it tells me I have 28 full years and 6 not full (mostly when I was a student with bits of work in the holidays).

I thought that 35 years of full contributions were needed for full pension? How can I qualify with 28 +2?

Probably doesn't make any difference as I'm likely to be working long enough to get more than enough, but am curious.

If you really want to satisfy that idle curiosity post up the following anonymous information from your forecast and NI record and someone will tell you exactly how you arrived at your current situation

Current weekly £££.pp amount up to April 2025.
Number of full NI years 15-16 and earlier.
Number of full NI years 16-17 and later.
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click 
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account

Thanks.
Never been contracted out.
2016 on - 9 years
2015 and before - 19 years

And the third important bit ?

Current weekly £££.pp amount up to April 2025.