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    • DailyDaz
    • By DailyDaz 11th Mar 18, 1:01 PM
    • 7Posts
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    DailyDaz
    Pension Forecast Confusion
    • #1
    • 11th Mar 18, 1:01 PM
    Pension Forecast Confusion 11th Mar 18 at 1:01 PM
    Hi.
    I have just checked my Wife's pension forecast on the government gateway website as she was keen to find out what she will get in 2024 when she hits retirement age of 66. It says she will receive 146.46 unless she contributes for another 3 years before 5 April 2024 to receive the full 159.55 per week. She has a total of 43 years of contributions of which 6 years had none or not enough contributions due to being unemployed or contracted out. She still has 37 years of full contributions as it says on her statement. My question is why does she have to contribute another 3 years to get her full pension? I thought you needed only 35 years. She no longer works or claims any benefits due to my income.
    Thanks.
Page 1
    • Brynsam
    • By Brynsam 11th Mar 18, 1:11 PM
    • 956 Posts
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    Brynsam
    • #2
    • 11th Mar 18, 1:11 PM
    • #2
    • 11th Mar 18, 1:11 PM
    Because she needs more of the qualifying years to be post-5 April 2016. See https://www.gov.uk/new-state-pension/how-its-calculated
    • TcpnT
    • By TcpnT 11th Mar 18, 1:15 PM
    • 117 Posts
    • 61 Thanks
    TcpnT
    • #3
    • 11th Mar 18, 1:15 PM
    • #3
    • 11th Mar 18, 1:15 PM
    Just search this forum for previous replies. This question is asked and answered almost every day.
    • noh
    • By noh 11th Mar 18, 1:19 PM
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    noh
    • #4
    • 11th Mar 18, 1:19 PM
    • #4
    • 11th Mar 18, 1:19 PM
    The Government Gateway NI record does not indicate which years you have been contracted out. It shows which years have a full record and which years are incomplete.

    In your wifes case she has 37 full years but it is likely that during five of these she was contracted out.

    Is there a COPE amount indicated on the pension statement?
    Last edited by noh; 11-03-2018 at 1:25 PM.
    • DailyDaz
    • By DailyDaz 11th Mar 18, 1:57 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    • #5
    • 11th Mar 18, 1:57 PM
    • #5
    • 11th Mar 18, 1:57 PM
    Thanks for getting back to me. It says she has a COPE estimate of 18.82 a week.
    • DailyDaz
    • By DailyDaz 11th Mar 18, 2:06 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    • #6
    • 11th Mar 18, 2:06 PM
    • #6
    • 11th Mar 18, 2:06 PM
    Really! She had 35 qualifying years in 2014.
    • Silvertabby
    • By Silvertabby 11th Mar 18, 2:09 PM
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    Silvertabby
    • #7
    • 11th Mar 18, 2:09 PM
    • #7
    • 11th Mar 18, 2:09 PM
    Thanks for getting back to me. It says she has a COPE estimate of 18.82 a week.
    Originally posted by DailyDaz
    Then she has an occupational contracted out pension, of some description, in addition to her State pension.

    There's no benefit in paying any missing or part years pre 2016 - but she can pay for a couple of years going forward.

    In round figures, voluntary class 3 NI contributions will cost her 750 for an extra 4.50 per State pension for the rest of her life (or 2,250 for 13.50 per week). At first glance, that looks expensive - but it's actually a very good deal - assuming she will be a standard rate tax payer in retirement, she'll break even after just 4 years (3 years if a non tax payer).

    I'm just a little older, also retired, and will be taking advantage of this deal myself.
    Last edited by Silvertabby; 11-03-2018 at 2:13 PM.
    • xylophone
    • By xylophone 11th Mar 18, 2:20 PM
    • 25,374 Posts
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    xylophone
    • #8
    • 11th Mar 18, 2:20 PM
    • #8
    • 11th Mar 18, 2:20 PM
    Is your wife currently in receipt of an occupational or private pension?

    Or is she due to receive one?
    • Dazed and confused
    • By Dazed and confused 11th Mar 18, 2:23 PM
    • 2,569 Posts
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    Dazed and confused
    • #9
    • 11th Mar 18, 2:23 PM
    • #9
    • 11th Mar 18, 2:23 PM
    Op, your wife should also be getting, now or in the future, a company pension worth at least 18.82/week although in reality probably much more.

    Any you deserve some credit for reading her statement correctly. You would be surprised at the number of posters who think they are going to get the 159.55 not 146.46 irrespective of future contributions.

    It says she will receive 146.46 unless she contributes for another 3 years before 5 April 2024 to receive the full 159.55 per week
    • DailyDaz
    • By DailyDaz 11th Mar 18, 2:48 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    Then she has an occupational contracted out pension, of some description, in addition to her State pension.

    There's no benefit in paying any missing or part years pre 2016 - but she can pay for a couple of years going forward.

    In round figures, voluntary class 3 NI contributions will cost her 750 for an extra 4.50 per State pension for the rest of her life (or 2,250 for 13.50 per week). At first glance, that looks expensive - but it's actually a very good deal - assuming she will be a standard rate tax payer in retirement, she'll break even after just 4 years (3 years if a non tax payer).

    I'm just a little older, also retired, and will be taking advantage of this deal myself.
    Originally posted by Silvertabby
    Although she was contacted out for 2 years, she has never received a statement from whoever she was contacted out with, neither aware of any other private pension, hence the confusion. The Gov statement says she needs to pay a voluntary of 733.20 by 5 April 2023 but may increase after 5 April 2019. I need to find where these contracted out payments went !!!!!
    • DailyDaz
    • By DailyDaz 11th Mar 18, 2:52 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    Op, your wife should also be getting, now or in the future, a company pension worth at least 18.82/week although in reality probably much more.

    Any you deserve some credit for reading her statement correctly. You would be surprised at the number of posters who think they are going to get the 159.55 not 146.46 irrespective of future contributions.

    It says she will receive 146.46 unless she contributes for another 3 years before 5 April 2024 to receive the full 159.55 per week
    Originally posted by Dazed and confused
    She is not in receipt of any income at all at the moment. Just waiting for pension age to arrive.
    • xylophone
    • By xylophone 11th Mar 18, 2:59 PM
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    xylophone
    Although she was contacted out for 2 years, she has never received a statement from whoever she was contacted out with,
    Try here

    https://www.gov.uk/find-pension-contact-details
    • xylophone
    • By xylophone 11th Mar 18, 3:03 PM
    • 25,374 Posts
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    xylophone
    With regard to not receiving a statement from the pension provider, deferred pensioners of one scheme I know were simply told to contact the administrator of the pension at Scheme Pension Age - no annual statements were provided.

    Your wife may have a statement of deferred benefits provided to her at the time she left the employment in question.
    • Silvertabby
    • By Silvertabby 11th Mar 18, 4:14 PM
    • 2,749 Posts
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    Silvertabby
    Although she was contacted out for 2 years, she has never received a statement from whoever she was contacted out with, neither aware of any other private pension, hence the confusion. The Gov statement says she needs to pay a voluntary of 733.20 by 5 April 2023 but may increase after 5 April 2019. I need to find where these contracted out payments went !!!!!
    Originally posted by DailyDaz
    When was this 2 years? If it was before 1988, then she may have needed 5 years service to be entitled to actual pension rights. If after 1988, then she may have needed a minimum of 2 years - 'almost 2 years' won't do it.

    Hopefully, she will have a pension tucked away somewhere - but at the very least she should be due a refund of her contributions (and a pension fund payment of her CEP to HMRC).

    Who did she work for?
    Last edited by Silvertabby; 11-03-2018 at 4:17 PM.
    • DailyDaz
    • By DailyDaz 11th Mar 18, 6:03 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    Things have taken a bit of a sinister turn. It appears in 1992 - 1994 she worked for an employer who saw fit to deduct tax and NI from their wages, but not actually pay this money to the government. This resulted in an inspectorate from the tax office turning up at the door and placing the company into liquidation to obtain missing funds. Not sure what the result was.
    Could this be the resultant hole in the funds? I'll still pursue the contracted out part.
    The statement for these years reads :-

    1993-94 Full year
    You have contributions from

    Paid employment: 542.53

    National Insurance credits: 1 week

    This week may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

    1992-93 Full year
    You have contributions from

    Paid employment: 434.65

    National Insurance credits: 4 weeks

    These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

    1991-92 Full year
    You have contributions from

    Paid employment: 24.43

    Voluntary: 43 weeks



    All other years read as this:-

    1990-91 Full year
    You have contributions from

    Paid employment: 425.73

    Except for 1975 - 1977

    1976-77 Full year
    You have contributions from

    Paid employment: 29.68

    National Insurance credits: 83 weeks

    These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

    1975-76 Full year
    You have contributions from

    Paid employment: 65.06

    National Insurance credits: 50 weeks

    These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.
    • xylophone
    • By xylophone 11th Mar 18, 6:17 PM
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    xylophone
    When was this 2 years? If it was before 1988, then she may have needed 5 years service to be entitled to actual pension rights. If after 1988, then she may have needed a minimum of 2 years - 'almost 2 years' won't do it.
    The OP's wife has a COPE on her state pension statement.

    https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service


    The pension you get from your workplace or personal pension scheme for the periods you were contracted out, should include an amount that, in most cases, will be the equivalent of the additional State Pension you would have got if you had not been contracted out. This is your Contracted Out Pension Equivalent (COPE) amount.

    An estimate of your COPE will be shown if you use the online Check your State Pension service or if you request a State Pension Statement through the post. The COPE amount is based on your National Insurance contribution record up to 5 April 2016 used to calculate your Starting Amount for the new State Pension. The COPE estimate shown in your statement is based on April 2016 State Pension rates.

    If you were a member of 2 or more contracted out schemes, the COPE amount shown is based on all your schemes and covers all the years you were contracted out.

    We will not know the exact amount your scheme will pay you as a result of contracting-out as it will depend on the actual rules of your private scheme, and possibly any investment choices you may make.

    If you are unsure when you will be paid your workplace or personal pension, please contact your scheme to find out. If you are unsure of their contact details, you can use the Pension Tracing Service.
    • Silvertabby
    • By Silvertabby 11th Mar 18, 7:09 PM
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    Silvertabby
    Things have taken a bit of a sinister turn. It appears in 1992 - 1994 she worked for an employer who saw fit to deduct tax and NI from their wages, but not actually pay this money to the government. This resulted in an inspectorate from the tax office turning up at the door and placing the company into liquidation to obtain missing funds. Not sure what the result was.
    Could this be the resultant hole in the funds? I'll still pursue the contracted out part.
    If the employer didn't pay anything to the government, then her HMRC records wouldn't show that she had been contracted out.

    Is it possible that her contracted out period relates to another employer? HMRC should be able to tell her the dates and give her a rough idea of which pension scheme holds her GMP liability.

    ADD: Unless your partner was on a very high salary at the time, 18 COPE sounds too high for just 2 years. Are you sure that she didn't have another contracted out job, and didn't realise that she had been entered into the pension scheme? Anything in the public sector, for example?

    xylophone - as far as the LGPS goes, if anyone left with less than pensionable service then their benefits would be 'frozen' rather then deferred. As far as HMRC were concerned, they were still contracted out for this period. If the pension fund member returned to the LGPS fold or transferred their benefits to another pension fund, then no action was needed. However, if the member opted to take a refund of their contributions then the CEP amount would be paid to HMRC thereby putting the ex-member back into SERPS/SP2 for that period.
    Last edited by Silvertabby; 12-03-2018 at 1:23 PM.
    • DailyDaz
    • By DailyDaz 13th Mar 18, 7:07 PM
    • 7 Posts
    • 1 Thanks
    DailyDaz
    Thanks to all that replied to this thread. You certainly explained things more clearer the HMRC's pension adviser did to the wife on the phone. She's looking into the contracted out part. HMRC want 733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.
    • xylophone
    • By xylophone 13th Mar 18, 7:23 PM
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    xylophone
    HMRC want 733 a year for the next six years from her. Seeing as she's not working, we'll take the hit on that.
    https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

    You can usually pay voluntary contributions for the past 6 years. The deadline is 5 April each year.

    She may want to save the money at the best interest rate she can get and pay in a lump sum nearer the time?

    Do let us know what she finds out about the private pension.
    • hyubh
    • By hyubh 13th Mar 18, 8:26 PM
    • 2,126 Posts
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    hyubh
    as far as the LGPS goes, if anyone left with less than pensionable service then their benefits would be 'frozen' rather then deferred. As far as HMRC were concerned, they were still contracted out for this period. If the pension fund member returned to the LGPS fold or transferred their benefits to another pension fund, then no action was needed. However, if the member opted to take a refund of their contributions then the CEP amount would be paid to HMRC thereby putting the ex-member back into SERPS/SP2 for that period.
    Originally posted by Silvertabby
    Hmm, you are misremembering slightly... if a refund went unclaimed, then I would expect the case to get processed as a frozen refund (status 9 if you were an AXISe'r - other systems use different terminology), at which point a CEP would have been paid. On the member rejoining, the administrator would then reclaim the CEP from HMRC as part of the auto-aggregation process.

    Put another way, if an LGPS administrator is currently doing a GMP reconciliation and a frozen refund case appears in the data from HMRC, then someone down the line has made an error, as HMRC should not be showing the period as contracted-out.

    DailyDaz - my first thought on reading your 'two years' line was that HMRC have no record of a CEP having been paid, even when it should have been. On the other hand, I agree with Silvertabby that 18 p/w is a non-trivial amount for two years, in fact it seems high to me even if it relates to a pre-88 period when schemes could (and usually did) wait 5 years before granting early leavers a preserved benefit. Your wife definitely needs to track this down.
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