Contracting Out and State Pension Forecast question

megamitts

I was looking at my State Pension forecast today as I'm 50 next year and I need to get my head around such things.

It tells me:

You can get your State Pension on  May 2043

Your forecast is £230.25 a week, £1,001.18 a month, £12,014.12 a year

That is if I make a further two years worth of payments.

However, later on it tells me I was contracted out for some time. I think I was contracted out for 4 years between 1998 and 2002 and then for 7 years between 2009 and 2016.

My question is does the forecast include those opted out years, in which case I have paid enough individual years in to get past those handful of years I was opted out. Or will I suddenly get another lower number in 2043 (I know the full pension will actually be higher and this is today's price - I estimate around £345 with a 2.5% increase every year). I'm assuming the forecast is correct and I'm worrying for nothing.

I have no breaks in NI contributions since 1992. 

Thanks for your help.

molerat

The forecast has already taken your contracted out status into account, what you see is what you will get.  Click here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account and you will see how your 2016 new scheme starting amount was affected by contracting out. It also states that it has no effect on your forecast.

megamitts

Thanks! I guessed I was worrying for nothing.

singhini

You’re doing exactly the right thing by checking early but based on what you’ve written, your assumption is correct and your worrying is unnecessary.

Your forecast already includes your contracted-out years

Two more qualifying years gets you the maximum under current rule
No nasty surprises coming in 2043

Nasty surprises coming in 2028/2029 onwards (if you continue to work you may well continue to pay NI, but those extra working years don’t increase State Pension once you’ve hit the max.
This often feels unfair, but that’s how the system is designed.

However its not all done and gloom - you could defer claiming your state pension and that can increase what you get. Also working longer still helps you through your workplace/private pensions.

squirrelpie

The fact that you were contracted out means that you have another pension somewhere that you earned whilst you were contracted out. Do you know where that pension is and how much it will pay you? If not, then now might be a good time to figure out where the pension is held and get details of it.