State pension calculation and HMRC calculator

xylophone

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

https://forums.moneysavingexpert.com/discussion/comment/81545382/#Comment_81545382

You are now aged 50. You have never been contracted out. You had 19 NIQY AT 6/4/16

Thus at 6/4/16, your starting amount  for new SP was the higher of 

Old Rules

{19/30 x £119.30) + SERPS/S2P.   £75.55 + SERPS/S2P.

New Rules

19/35 x £155.60                               £84.49

Each QY from 6/4/16 onwards would add 1/35 of NSP up to (BUT NOT BEYOND) full NSP. 

cockerWalker

molerat said:

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.

£217.88 to April 2025

SnowMan

Here are the calculations

Silvertabby

So, you do indeed only need two more years of NI contributions to take you to the (current) nSP of £230.25, despite only having 30 years.

No doubt you will be told by pre 2016 pensioners that you are 'lucky' to have this amount, while they are on a lower rate.  But, the truth is, you are one of the losers under the new pension scheme.  Had SERPS/SP2 not ended in 2016, you would have gone on accruing more earnings related additional State pension, instead of being capped at the nSP amount.

cockerWalker

Silvertabby said:

So, you do indeed only need two more years of NI contributions to take you to the (current) nSP of £230.25, despite only having 30 years.

No doubt you will be told by pre 2016 pensioners that you are 'lucky' to have this amount, while they are on a lower rate.  But, the truth is, you are one of the losers under the new pension scheme.  Had SERPS/SP2 not ended in 2016, you would have gone on accruing more earnings related additional State pension, instead of being capped at the nSP amount.

While I may only need 30 years, it's not like I can stop paying NI anyway! I guess that psychologically it may be nice in a year and a half to know I'll eventually get a full state pension, but it's not going to change behaviour