State Pension for me - confused - help please

happyhero · 16 March 2017 at 10:43PM

I'm struggling a bit with state pension info online to make it clear for my particular case.

I'm 56 born 1961. I left work in 2005 to live off savings/investments. At that time I had 30 qualifying NI years which I'm sure I phoned up about and was told that would give me a full state pension but when I did a quick state pension forecast online last year it looked like that 30 years was not enough and I wouldn't get a full state pension.

Have I got something wrong/mixed up?

Will I get a full state pension?

Should I and could I top my state pension up?

If I could what would it likely cost me?

Would the money be better directed to a SIPP as I am a keen investor?

molerat · 16 March 2017 at 10:54PM

The rules changed in April 2016. Up until then you only needed 30 years contributions to get a full basic pension. Now it is 35 years to get the new higher pension. But there are transitional arrangements to ensure you are no worse off under the new system than you were under the old.

At April 2016 you were given a starting amount which is the higher of your entitlement under the old or new systems. You need to get a new forecast to see how much you have to start with, how many years you have credited, find out if you were contracted out and if so how much the COPE amount is. From there you can calculate how much you need to make up to the new amount and whether to buy pre or post 2016 contributions which will cost in the region of £700 for each year purchased but will pay back in 3-4 years once retired, way better than anything else you can buy out there. No rush to do it as you have up until April 2019 to buy those old years, back as far as 2006, at old prices.

Get a new forecast, come back with the numbers and you will get some help.

p00hsticks · 17 March 2017 at 12:34AM

molerat wrote: »

Get a new forecast, come back with the numbers and you will get some help.

Link to get a forecast is here;
https://www.gov.uk/check-state-pension

robber2 · 17 March 2017 at 2:30AM

Trust the website not the muppets on the other end of the phone.

Rob

Magnolia · 17 March 2017 at 8:36AM

It was the 'muppets' on the end of the phone that helped me to understand what would happen when I retired. They were brilliant and so helpful!

molerat · 17 March 2017 at 9:33AM

The problem we hear many times is that the helpline staff simply do not understand that buying missing pre 2016 years will often have no effect on increasing your pension.

woolly_wombat · 17 March 2017 at 9:47AM

molerat wrote: »

The problem we hear many times is that the helpline staff simply do not understand that buying missing pre 2016 years will often have no effect on increasing your pension.

Indeed.

There have also reportedly been some problems with the online state pension forecast system in some instances, so you might like to consider getting a forecast the old-fashioned way i.e. completing form BR19 (also on gov website).

Silvertabby · 17 March 2017 at 10:30AM

“ The problem we hear many times is that the helpline staff simply do not understand that buying missing pre 2016 years will often have no effect on increasing your pension.
Originally posted by molerat ”
Indeed.

There have also reportedly been some problems with the online state pension forecast system in some instances, so you might like to consider getting a forecast the old-fashioned way i.e. completing form BR19 (also on gov website).

We did both. It took about 6 weeks for the paper estimates to get back to us, but it was re-assuring to see that they were virtually the same as our on-line estimates.

I suppose our records were fairly straightforward, though - both with over 40 years NI conts, and both contracted out from 1978.

System · 17 March 2017 at 11:30AM

Hi

Via Gov Gateway temporarily unavailable, please try later.

I getting old how much later? I aint got long y'know.

xylophone · 17 March 2017 at 12:13PM

You need to get a new forecast to see how much you have to start with, how many years you have credited, find out if you were contracted out and if so how much the COPE amount is.

It would appear from earlier posts that the OP worked for BT for 25 years and expects to draw his deferred DB/Final Salary pension in 2021.

He says that he gave up work in 2005 and checked that he had 30 years NI paid or credited.

His NSP statement should show a starting amount which is the greater of his entitlement under the old/new rules.

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0587

The likelihood is that his "starting amount" will be well under NSP so that he will be able to increase it to full NSP with voluntary contributions.

happyhero · 17 March 2017 at 12:19PM

Hi guys thanks for all the inputs, here is what it says for me on the pension website

[FONT=&quot]Your State Pension [/FONT]
[FONT=&quot]You can get your State Pension on 22 November 2027. Your forecast is [/FONT]
[FONT=&quot]£155.65 a week[/FONT]
[FONT=&quot]£676.80 a month, £8,121.59 a year [/FONT]
[FONT=&quot]Your forecast[/FONT]

[FONT=&quot]is not a guarantee and is based on the current law[/FONT]
[FONT=&quot]does not include any increase due to inflation[/FONT]

[FONT=&quot]You need to continue to contribute National Insurance to reach your forecast[/FONT]
[FONT=&quot]Estimate based on your National Insurance record up to 5 April 2016 [/FONT]

[FONT=&quot]£119.30 a week [/FONT]

[FONT=&quot]Forecast if you contribute another 9 years before 5 April 2027 [/FONT]

[FONT=&quot]£155.65 a week [/FONT]

[FONT=&quot]£155.65 is the most you can get[/FONT]
[FONT=&quot]You cannot improve your forecast any further, unless you choose to put off claiming.[/FONT]
[FONT=&quot]If you’re working you may still need to pay National Insurance contributions until 22 November 2027 as they fund other state benefits and the NHS.[/FONT]
[FONT=&quot]View your National Insurance record[/FONT]
[FONT=&quot]How contracting out affects your pension income[/FONT]
[FONT=&quot]Like most people, you were contracted out of part of the State Pension.[/FONT]
[FONT=&quot]More about how contracting out has affected your pension income.[/FONT]
[FONT=&quot]Putting off claiming[/FONT]
[FONT=&quot]When you are 66, you can put off claiming your State Pension. Doing this may mean you get extra State Pension when you do come to claim it. The extra amount, along with your State Pension, forms part of your taxable income.

[FONT=&quot]Clicking on the link "How contracting out effects your pension, I get this page

[/FONT][/FONT]
[FONT=&quot][FONT=&quot] [FONT=&quot]You were contracted out [/FONT]
[FONT=&quot]In the past you’ve been part of one or more contracted out pension schemes, such as workplace or personal pension schemes.[/FONT]
[FONT=&quot]When you were contracted out:[/FONT]

[FONT=&quot]you and your employers paid lower rate National Insurance contributions; or[/FONT]
[FONT=&quot]some of your National Insurance contributions were paid into your private pension schemes instead[/FONT]

[FONT=&quot]Contracted Out Pension Equivalent (COPE)[/FONT]
[FONT=&quot]Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]Your COPE estimate is £85.27 a week.[/FONT]

[/FONT][/FONT]

State Pension for me - confused - help please

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free