Contracted out pension

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  • Gers
    Gers Posts: 12,013 Forumite
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    edited 23 October 2016 at 3:01PM
    50Twuncle wrote: »
    making an unheard of 41 years work for max state pension

    I have 46 years of full and contracted out NI contributions - female aged 62.5 years - and still needed 2 more years of NI to receive a full state pension in 2019. I only had to pay for 17 weeks for 2015 / 16 as I was working very part time and received NI credits and now I have agreed to more hours until May 2017 I'll wait to see how much I need to pay then.

    I started work aged 16 years and, thankfully, haven't been our of work since. Even though I ceased full time work in April of 2015 my skills are still in demand.

    My COPE deduction is listed as something nearing £50.00 a week. The small amount I will pay for class 3 contributions makes it a good deal for me.

    Good luck in working it out!
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
    Deneb wrote: »
    I have two contracted out occupational pensions. My current state pension forecast is just over £120 per week.

    I intend to retire early next year. If I purchase another 6 years of Class 3 NICs my SP is forecast to be just over £147 per week at current rates when I reach 66.

    How is that "nothing to gain"?

    Well obviously it depends if you've made 35+ years of contributions. If you have there is nothing to gain.

    Cheers fj
  • molerat
    molerat Posts: 31,817 Forumite
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    bigfreddiel wrote: »
    Well obviously it depends if you've made 35+ years of contributions. If you have there is nothing to gain.

    Cheers fj
    You need to differentiate between pre and post 2016 years. Someone with 35+ pre 2016 years and contracted out can gain by buying post 2016 years.
  • BoxerfanUK
    BoxerfanUK Posts: 685 Forumite
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    jamesd wrote: »
    From 6 April 2016 each new year of paying in or buying years with dates of 2016-17 and later (but not earlier years!) will add 1/35th of the flat rate until the flat rate cap level is reached.

    The 2015-16 tax year will be included in calculations around November or December this year.
    jamesd

    Am I reading right that the 15-16 tax year is not yet included in current pension forecast calculations?

    I recently got a forecast online which states my foundation amount to 5th April 16 is £130.92, so is this figure only based on contributions up to the 5th April 15?

    I've been contracted out for over 33 years (PCSPS)and worked out I would need to pay NI for another 5.5 years to achieve full SP amount, but if what you are saying is correct it may only be 4.5 years.

    Also, if I stop work before then and pay class 3 NI can I pay for the .5 year or do I have to pay for a full year for it to count?
  • molerat
    molerat Posts: 31,817 Forumite
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    It is up to whatever year it states, some are updated to 2016 and others still show 2015. Only full years count so you have to decide if it is worth paying a full year contribution to get a part year benefit.
  • 50Twuncle
    50Twuncle Posts: 10,763 Forumite
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    How long did it take to receive a pension forecast from HMRC ?
    I sent off a form BR19 on 27/10 and it claims that you should receive are response within 10 days - nothing yet !!
  • Linton
    Linton Posts: 17,129 Forumite
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    xylophone wrote: »
    ....

    Under the old scheme this will be a full BSP of £119.30 ( because you have 30 years NI) + any Additional Pension - a deduction because you were contracted out.

    ....

    Surely under the old scheme you get the full BSP and any Additional Pension (SERPS as was). There isnt a deduction because of contracting out, you just dont get the AP/SERPS for those years.
  • xylophone
    xylophone Posts: 44,343 Forumite
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    Surely under the old scheme you get the full BSP and any Additional Pension (SERPS as was). There isnt a deduction because of contracting out, you just dont get the AP/SERPS for those years.

    See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf
  • Linton
    Linton Posts: 17,129 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    Linton wrote:
    Surely under the old scheme you get the full BSP and any Additional Pension (SERPS as was). There isnt a deduction because of contracting out, you just dont get the AP/SERPS for those years.
    xylophone wrote: »
    See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

    From my reading of your reference it looks like we were both sort of right! The AP used in the calculation under the old scheme is more or less what would have been earned had the employee been contracted in. So the COD simply resets it back to what AP was actually earned. This is precisely the case for the period 1979-1998. Later contracting out get a little more complicated!

    So COD under the old scheme cant reduce the pension to less than the corresponding BSP whereas COD under the new scheme does.
  • xylophone
    xylophone Posts: 44,343 Forumite
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    How long did it take to receive a pension forecast from HMRC ?
    I sent off a form BR19 on 27/10 and it claims that you should receive are response within 10 days - nothing yet !!

    http://forums.moneysavingexpert.com/showthread.php?t=5541435&page=5
    I'm still awaiting the letter for my SP forecast.

    For anyone else who has ordered a statement, apparently there has been a huge demand,
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