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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 31st Mar 16, 1:09 PM
    • 75Posts
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    MSE Helen Saxon
    New State Pension Guide
    • #1
    • 31st Mar 16, 1:09 PM
    New State Pension Guide 31st Mar 16 at 1:09 PM
    Hi!

    This is the discussion thread for the



    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,
Page 19
    • p00hsticks
    • By p00hsticks 17th Oct 17, 3:15 PM
    • 6,203 Posts
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    p00hsticks
    1. Is there any point in paying the £243.50 from 2013-14 and / or £705 from 2015-16? If I do, will that increase my current £130.62pw figure?
    Originally posted by greensea27
    No - as you have over the 30 years NI required under the old rules, increasing the number of pre-2016 years won't help you.

    2. As I very much doubt I'll be working again between now and receiving my State Pension in 2025, I presume I can, between now and then, 'buy' the extra 6.5 years I require to boost my SP to the £159.55pw quoted. Is that correct?
    a
    Originally posted by greensea27
    Yes you can - although I think your pension is only calculated in whole years. Each full year adds 1/35th of the maximum £159.55 to your pension (around £4.55), up to the maximum. so buying six years will take you up to around £158.00 a week, whilst buying a seventh year will only get you about an additional £1.55, so not as good value as the first six years.
    • gadgetmind
    • By gadgetmind 17th Oct 17, 6:19 PM
    • 10,785 Posts
    • 8,662 Thanks
    gadgetmind
    Here's something that was predictable but unpredicted (by me).

    At the time everyone got foundation amounts, I was a good way ahead of the single tier max due to lots of S2P and not much contracting out. But the single tier has risen with inflation while my number was "frozen", so I'm now at max. So all the extra NI I paid has been effectively spirited away, so I'm *really* glad that I contracted out and have a £75k pot thanks to that.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • greensea27
    • By greensea27 18th Oct 17, 9:24 AM
    • 22 Posts
    • 3 Thanks
    greensea27
    Thanks p00h - one last question if I may. I've read that there's little point in buying any extra years before you need to (i.e. upon the point of claiming SP) just in case you pop it before reaching State Pension age. But are you time limited in how many you can buy? Can I (hypothetically) buy the 6 I need in early 2025, or will it be better to buy them gradually over the next few years?
    • molerat
    • By molerat 18th Oct 17, 10:29 AM
    • 18,582 Posts
    • 12,736 Thanks
    molerat
    You can buy years up until 6 years after the end of the year. They stay at the in year price for 2 years after the end of the year but increase to the current year price after that.
    Last edited by molerat; 18-10-2017 at 10:31 AM.
    www.helpforheroes.org.uk/donations.html
    • GunJack
    • By GunJack 18th Oct 17, 11:00 AM
    • 10,114 Posts
    • 7,575 Thanks
    GunJack
    Here's something that was predictable but unpredicted (by me).

    At the time everyone got foundation amounts, I was a good way ahead of the single tier max due to lots of S2P and not much contracting out. But the single tier has risen with inflation while my number was "frozen", so I'm now at max. So all the extra NI I paid has been effectively spirited away, so I'm *really* glad that I contracted out and have a £75k pot thanks to that.
    Originally posted by gadgetmind
    but your basic newSP will increase by triple lock in line , and your protected amount (above the £155-odd) by a smaller amount (just cpi i think) between now and claiming it, so not frozen, just can't accumulate more in SP, just in your private pension.

    Your NI pays for more than just SP, so it's not been "spirited away"...
    ......Gettin' There, Wherever There is......
    • gadgetmind
    • By gadgetmind 18th Oct 17, 12:54 PM
    • 10,785 Posts
    • 8,662 Thanks
    gadgetmind
    but your basic newSP will increase by triple lock in line , and your protected amount (above the £155-odd) by a smaller amount (just cpi i think) between now and claiming it, so not frozen, just can't accumulate more in SP,
    Originally posted by GunJack
    True, but my S2P payments count for nothing (but no choice other than to pay) and nor was there any point contracting back in when I did. Still, you can only act based on what you know at the time.

    just in your private pension.
    Nope, maxed out.

    Your NI pays for more than just SP, so it's not been "spirited away"...
    Well, it's going to people other than me, which is the same in my book.

    As I can't get any more SP or private pension, it may be time for pipe and slippers!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • GunJack
    • By GunJack 18th Oct 17, 3:35 PM
    • 10,114 Posts
    • 7,575 Thanks
    GunJack
    True, but my S2P payments count for nothing (but no choice other than to pay) and nor was there any point contracting back in when I did. Still, you can only act based on what you know at the time.

    your SERPS/S2P payments built up part of your newSP and your protected amount, and contracting out for everyone ended over the last 5 years.... remember the basic old SP was £119pw, so your S2P built up everything over that

    Nope, maxed out.

    so you still put £2880 in every year still, or are you over 75?

    Well, it's going to people other than me, which is the same in my book.

    never needed the NHS, or any state benefits yet?
    Unlikely you'll go all your life without either/both, if you've paid NI you're ok, you're covered


    As I can't get any more SP or private pension, it may be time for pipe and slippers!
    Originally posted by gadgetmind
    Not trying to be argumentative, just saying....
    ......Gettin' There, Wherever There is......
    • gadgetmind
    • By gadgetmind 18th Oct 17, 3:43 PM
    • 10,785 Posts
    • 8,662 Thanks
    gadgetmind
    so you still put £2880 in every year still, or are you over 75?
    Originally posted by GunJack
    No, can't put any more in as at (OK, over thanks to Brexit) current LTA.

    As for cash state benefits, I'll get state pension at age 67 but nothing else unless you count bus pass, which will probably be means tested by then along with everything else! NHS you get no matter how little NI you've paid. Me paying more NI now won't get me anything in return so I'm less than enthusiastic to be doing it.

    Not trying to be argumentative, just saying....
    Originally posted by GunJack
    Understood and appreciated.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • macg1953
    • By macg1953 29th Nov 17, 11:07 PM
    • 2 Posts
    • 0 Thanks
    macg1953
    State Pension deduction for being contracted out?
    Firstly apologies for asking this question, it has been asked before, but answered ambiguously in a very complex manner.
    Quite simply, I am 64 and will receive state pension next year. I have 45 full qualifying years, during which I was contracted out of Serps until 1996. Possibly 25 years in total. After this I was contracted back in and paid full NI until 2 years ago.
    I obtained my state pension forecast which came in at just over £177 per week BUT my COPE estimate for contracting out is £77.
    My question simply is, will I receive full forecast £177 or will this be reduced by the COPE estimate, giving me £107 per week (rounded up by the government safety net to £119 per week)
    The forum answers vary in complexity and some some yes I will receive the full £177, others say no. The government helpline tell me that my £177 will NOT have a deduction, meaning I will get the full £177 per week,
    Non-complex replies to this will be much appreciated!
    • hyubh
    • By hyubh 29th Nov 17, 11:58 PM
    • 2,124 Posts
    • 1,632 Thanks
    hyubh
    My question simply is, will I receive full forecast £177 or will this be reduced by the COPE estimate, giving me £107 per week
    Originally posted by macg1953
    The COPE figure isn't taken off, it's already been accounted for when determining your starting amount under the new state pension regime.

    The forum answers vary in complexity and some some yes I will receive the full £177, others say no.
    Where so for the latter...? A potential issue is that the forecast will be assuming NI contributions to the year before SPA, but as you're already there, that consideration doesn't apply.
    • xylophone
    • By xylophone 30th Nov 17, 12:11 AM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    If your forecast is £177 a week, that is what ( increased as below) you will get.

    At 6/4/16, two calculations were done.

    (1) Old rules

    Full Basic State Pension (£119.30) + (SERPS/S2P - Deduction for contracting out).

    (2) New rules

    (35/35 X £155.65) - COPE.

    Your "starting amount" was the higher of the two.

    It would seem that although you had a contracted out deduction, you had accrued enough additional pension after your contracting out ended for calculation (1) to be £177.

    https://www.gov.uk/new-state-pension/how-its-calculated

    You have a full new state pension plus a protected payment - see above link for how it increases in payment.
    • Straightbat
    • By Straightbat 4th Mar 18, 11:52 PM
    • 11 Posts
    • 1 Thanks
    Straightbat
    Additional NI contributions after April 2016
    The Government web-site is not very clear on this, but a newspaper article I have read by Steve Webb seems to confirm that if my new state pension starting amount is below the maximum and my retirement age is after April 2017 I can pay a voluntary National Insurance contribution for 2016-17 to enhance my pension's starting amount, and so on for every complete year until I reach my state pension age. But there is nothing in the MSE guide about this even though it would seem to be an excellent way to enhance one's pension if the funds are available.

    Secondly my state pension age is actually February 2018 so I can only purchase one of these years anyway. But is it too late for me to do this now?

    (And thirdly, if all this is correct, why is there so little information about it?)
    • Straightbat
    • By Straightbat 5th Mar 18, 12:07 AM
    • 11 Posts
    • 1 Thanks
    Straightbat
    Additional NI contributions after April 2016
    The Government web-site is not very clear on this, but a newspaper article I have read by Steve Webb seems to confirm that if my new state pension starting amount is below the maximum and my retirement age is after April 2017 I can pay a voluntary National Insurance contribution for 2016-17 to enhance my pension's starting amount, and so on for every complete year until I reach my state pension age. But there is nothing in the MSE guide about this even though it would seem to be an excellent way to enhance one's pension if the funds are available.

    (Excerpt from article: "With regard to future years, the key question is whether your starting amount is less than £155.65, regardless of whether it was worked out under the old system or the new system. If your starting amount is under this rate, then any full year of contributions or credits from 2016/17 onwards will add to your state pension. The price of voluntary contributions is generally relatively modest compared with the extra pension you get, so as long as you draw a state pension for four or so years then you will get back what you have paid and more.")

    Secondly my state pension age is actually February 2018 so I can only purchase one of these years anyway. But is it too late for me to do this now?

    (And thirdly, if all this is correct, why is there so little information about it?)
    • p00hsticks
    • By p00hsticks 5th Mar 18, 12:09 AM
    • 6,203 Posts
    • 6,642 Thanks
    p00hsticks
    The Government web-site is not very clear on this, but a newspaper article I have read by Steve Webb seems to confirm that if my new state pension starting amount is below the maximum and my retirement age is after April 2017 I can pay a voluntary National Insurance contribution for 2016-17 to enhance my pension's starting amount, and so on for every complete year until I reach my state pension age. But there is nothing in the MSE guide about this even though it would seem to be an excellent way to enhance one's pension if the funds are available.

    Secondly my state pension age is actually February 2018 so I can only purchase one of these years anyway. But is it too late for me to do this now?

    (And thirdly, if all this is correct, why is there so little information about it?)
    Originally posted by Straightbat
    It may not be in the MSE guide but it's been discussed frequently on this board. This is the guide most commonly linked to for great guidance on the subject

    https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

    I believe you can go back up to six years to pay incomplete NI years - as far as I'm aware the fact that you are now over State Pension age doesn't prevent that.
    • Straightbat
    • By Straightbat 5th Mar 18, 1:23 AM
    • 11 Posts
    • 1 Thanks
    Straightbat
    Perfect, thank-you! But I am still shocked by the lack of information about this in the MSE guide and on the government web-site, where it is almost impossible to distinguish it from buying missing years before 2016, therefore leading to much uncertainty as that is a different scenario.

    It is very disappointing of MSE who always give the excuse that they can't give too much detail, because in fact this what they always do, lulling everyone into a false sense of them having covered every eventuality!

    It is particularly annoying and actually misleading (therefore bordering on misinformation) because you could easily end your research in ignorance as a result of this, when there is a section on how to enhance your pension from which this option is missed out completely with no indication that the section is, or could be, incomplete.

    (It needs to be highlighted because it is not just a matter of getting up to 35 years - you can purchase more after 2016 that takes you over 35 and still have an impact on your pension - can't you?)
    • p00hsticks
    • By p00hsticks 5th Mar 18, 1:34 AM
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    • 6,642 Thanks
    p00hsticks
    (It needs to be highlighted because it is not just a matter of getting up to 35 years - you can purchase more after 2016 that takes you over 35 and still have an impact on your pension - can't you?)
    Originally posted by Straightbat
    You can - and there will also be people out there who have already reached the new maximum in less than 35 years (although if working they will still have to pay NI until they give up working or reach State Pension age).

    The issue is, I think, that the media have just picked up on the '35 years for a new State Pension' without qualifying this by saying that that is only for people just starting their working lives - for the rest of us there are transitional rules in place which means that everyone's position is different.

    However, it is pretty straightforward to get an individual pension forecast online via gov.uk and everyone should be encouraged to do this.
    • Straightbat
    • By Straightbat 5th Mar 18, 1:45 AM
    • 11 Posts
    • 1 Thanks
    Straightbat
    But MSE presents itself as the consumer champion, able to pick holes in everyone else's shoddy or incomplete advice! A bit of humility wouldn't go amiss! And I'm not sure an individual forecast would make this clear either, would it? If all we need is one of those, why bother with an MSE guide at all?
    • Terron
    • By Terron 5th Mar 18, 10:18 AM
    • 219 Posts
    • 191 Thanks
    Terron
    As for cash state benefits, I'll get state pension at age 67 but nothing else unless you count bus pass, which will probably be means tested by then along with everything else! NHS you get no matter how little NI you've paid. Me paying more NI now won't get me anything in return so I'm less than enthusiastic to be doing it.
    Originally posted by gadgetmind
    It's called National Insurance for a reason. Paying insurance and not having to use it is generally considered a good thing. There are benefits you only get if you have paid. which you probably don't expect and hope not to need.
    Last edited by Terron; 05-03-2018 at 10:20 AM.
    • mgdavid
    • By mgdavid 5th Mar 18, 10:02 PM
    • 5,594 Posts
    • 4,916 Thanks
    mgdavid
    Perfect, thank-you! But I am still shocked by the lack of information about this in the MSE guide and on the government web-site, where it is almost impossible to distinguish it from buying missing years before 2016, therefore leading to much uncertainty as that is a different scenario.

    It is very disappointing of MSE who always give the excuse that they can't give too much detail, because in fact this what they always do, lulling everyone into a false sense of them having covered every eventuality!

    It is particularly annoying and actually misleading (therefore bordering on misinformation) because you could easily end your research in ignorance as a result of this, when there is a section on how to enhance your pension from which this option is missed out completely with no indication that the section is, or could be, incomplete.

    (It needs to be highlighted because it is not just a matter of getting up to 35 years - you can purchase more after 2016 that takes you over 35 and still have an impact on your pension - can't you?)
    Originally posted by Straightbat
    All the information on MSE is worth exactly what you paid for it.
    You may do well to stop and mull over that for a few minutes.
    There is a grave danger of future generations believing everything they read on the internet as if it were 'the truth, the whole truth and nothing but the truth'.
    It isn't.
    The questions that get the best answers are the questions that give most detail....
    • Straightbat
    • By Straightbat 5th Mar 18, 11:26 PM
    • 11 Posts
    • 1 Thanks
    Straightbat
    Thank you David but I only needed a few seconds.

    I am very appreciative of MSE but there is a touch of arrogance which grates a bit! (Ok, maybe it is justified in comparison with other sources of advice, but "physician heal thyself" also comes to mind when there are omissions that could easily mislead the purportedly well led public!)

    And in actual fact I do pay for it...through all of the revenue generated when I click on its links, and through all the commission it is paid when I use it to switch energy provider!
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