State Pension

Conradfan · 10 February 2018 at 2:48PM

I receive a state pension which is subject to a contracted out deduction. This amount varies from year to year - generally increasing. Does anyone know the basis on which the annual changes are calculated?

Thanks in anticipation

zagfles · 10 February 2018 at 2:53PM

It should be at the same rate as your GMP is increasing. GMP is paid as part of your occupational pension. Increases should be CPI capped at 3% for service between 1988-1997.

Linton · 10 February 2018 at 2:56PM

The SP currently increases each year by the triple lock - the greater of CPI inflation, wages growth, and 2.5%.

Things get more complicated if you reached SP age prior to April 2016 or are receiving Extra Pension from having deferred it some time in the past.

The contracted out deduction doesnt come into the calculation - the whole post 2016 pension is treated as a single payment calculated on the basis of your situation in April 2016. After that date the contracted out deduction no longer forms part of any calculation.

xylophone · 10 February 2018 at 3:30PM

I receive a state pension which is subject to a contracted out deduction. This amount varies from year to year - generally increasing. Does anyone know the basis on which the annual changes are calculated?

You started receiving your pension before 6.4.16 and and some point received a letter like the one here? Post 21.

https://forums.moneysavingexpert.com/discussion/4532605

You can read on from there - and post 45 might help.

State Pension

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