SP Forecast Not adding Up

I just checked my SP forecast and it doesn't seem to add up.

Forecast = 159.55
Estimate to 5/4/17 = 141.31
Forecast if you contribute another 5 years = 159.55.

I checked my NI record and the 31 years excludes one year still under investigation.

If the current max of 159.55 assumes 35 years of contributions then I calculate I am short 4 years of contributions, not 5.

Could a kind person please check my math and advise if I am having a late-night mental block, or whether the forecast is wrong?

Many thanks for your help.
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Comments

  • Dox
    Dox Posts: 3,116
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    You don't say how old you are, but it could be that you don't have enough post-2016 years of NI. See https://www.gov.uk/new-state-pension/how-its-calculated
  • Simple_Soul
    Simple_Soul Posts: 48 Forumite
    edited 31 March 2018 at 6:20AM
    DairyQueen wrote: »
    I just checked my SP forecast and it doesn't seem to add up.

    Forecast = 159.55
    Estimate to 5/4/17 = 141.31
    Forecast if you contribute another 5 years = 159.55.

    I checked my NI record and the 31 years excludes one year still under investigation.

    If the current max of 159.55 assumes 35 years of contributions then I calculate I am short 4 years of contributions, not 5.
    .

    I am no expert, but those figures do look wrong to me. It has nothing to do with the 35 years, because if you are older, that would not apply to you anyway.
    But, every full year of NICs (National Insurance Contributions) after the start of the NSP (New State Pension) on 6th April 2016, should add £4.56 p.w. to the SP (State Pension) that you have already earned.

    In your case you have already earned £141.31 up to 5th April 2017. Therefore, £141.31 + (£4.56 x 4 years)= £159.55.

    You only need 4 more years, unless I am missing something. Maybe the year under investigation was included in the £141.31 and is messing the figures up?
  • GunJack
    GunJack Posts: 11,669
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    ..or, the number of years include getting to the new uprated value of SP (3% uplift due from Apr 18, CPI), but the value is still listed as £159.55 maybe...there was some discussion of this type of reporting error in the last week or so, where the £159.55 can't be changed until after the increase has been applied.

    There's 2 possibilities for you DQ :)
    ......Gettin' There, Wherever There is......

    I have a dodgy "i" key, so ignore spelling errors due to "i" issues, ...I blame Apple :D
  • Linton
    Linton Posts: 17,062
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    I guess it is the year under investigation being included in the 5.
  • Tom99
    Tom99 Posts: 5,371
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    Is it that you have 5 more years to SPA rather than 5 more NI years needed?
  • DairyQueen
    DairyQueen Posts: 1,822
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    Thanks all.

    I also calculated the shortfall as 4 years (at £4.56 p.a.).

    Good news = my math is right.
    Bad news = forecast may be misleading.

    Add the soon-to-end-current tax year, plus the year under investigation (I know I paid sufficient NI) and, as of 6th April this year, I will be 2 years short of full nSP qualification with 7 years to go.

    Conclusion: don't rely on the summary forecast. Always check the NI breakdown, and especially before making any voluntary contributions.
  • DairyQueen
    DairyQueen Posts: 1,822
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    Another quick question for the the experts please:

    I last communicated with DWP and HMRC about my NI contribution record over a year ago. There are several inconsistencies between their records and my record of employment and contracting-out. Most of these inconsistencies won't affect my SP. The year 97/98 will have an impact. It has now been 'under investigation' for two years.

    Has anyone any experience of how long it takes for these issues to be resolved? I'm not losing any sleep over this at the moment (over 7 years until SP age) but HMRC promised a written response 'within 6 weeks'.... ahem.... a year ago.
  • LHW99
    LHW99 Posts: 4,135
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    If their timescale was 6 weeks and you have given them 52, I would chase again!
  • Simple_Soul
    Simple_Soul Posts: 48 Forumite
    In your case you have already earned £141.31 up to 5th April 2017. Therefore, £141.31 + (£4.56 x 4 years)= £159.55.

    I have had another thought. Your particular calculation (above) is very, very, unusual in that it works out at EXACTLY £159.55 p.w. (I.e. the full NSP).

    £159.55 p.w. divided by 35 years = £4.56
    Or, more exactly: £4.558

    What if some silly billy at the DWP used £4.558 rather than £4.56 in the calculation?

    The result, in your case, would be that you would need 5 years to reach £159.55 p.w.
    Because, if you only contributed 4 years, you would be short by one penny.

    I suggest you ring the helpline number, provided at the bottom of the State Pension Forecast, to verify this.
  • DairyQueen
    DairyQueen Posts: 1,822
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    Jeez, I never considered this possibility. Given the issues I have experienced with HMRC's reconciliation of my NI record, nothing would surprise me.

    I wish I had made a copy of previous online forecasts as I think they changed my starting amount at one point. I wonder if that could have triggered a rounding error?

    Thanks for the very helpful replies everyone.
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