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  • FIRST POST
    • DairyQueen
    • By DairyQueen 31st Mar 18, 12:09 AM
    • 482Posts
    • 780Thanks
    DairyQueen
    SP Forecast Not adding Up
    • #1
    • 31st Mar 18, 12:09 AM
    SP Forecast Not adding Up 31st Mar 18 at 12:09 AM
    I just checked my SP forecast and it doesn't seem to add up.

    Forecast = 159.55
    Estimate to 5/4/17 = 141.31
    Forecast if you contribute another 5 years = 159.55.

    I checked my NI record and the 31 years excludes one year still under investigation.

    If the current max of 159.55 assumes 35 years of contributions then I calculate I am short 4 years of contributions, not 5.

    Could a kind person please check my math and advise if I am having a late-night mental block, or whether the forecast is wrong?

    Many thanks for your help.
Page 1
    • Dox
    • By Dox 31st Mar 18, 1:01 AM
    • 938 Posts
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    Dox
    • #2
    • 31st Mar 18, 1:01 AM
    • #2
    • 31st Mar 18, 1:01 AM
    You don't say how old you are, but it could be that you don't have enough post-2016 years of NI. See https://www.gov.uk/new-state-pension/how-its-calculated
    • Simple Soul
    • By Simple Soul 31st Mar 18, 7:12 AM
    • 48 Posts
    • 31 Thanks
    Simple Soul
    • #3
    • 31st Mar 18, 7:12 AM
    • #3
    • 31st Mar 18, 7:12 AM
    I just checked my SP forecast and it doesn't seem to add up.

    Forecast = 159.55
    Estimate to 5/4/17 = 141.31
    Forecast if you contribute another 5 years = 159.55.

    I checked my NI record and the 31 years excludes one year still under investigation.

    If the current max of 159.55 assumes 35 years of contributions then I calculate I am short 4 years of contributions, not 5.
    .
    Originally posted by DairyQueen
    I am no expert, but those figures do look wrong to me. It has nothing to do with the 35 years, because if you are older, that would not apply to you anyway.
    But, every full year of NICs (National Insurance Contributions) after the start of the NSP (New State Pension) on 6th April 2016, should add 4.56 p.w. to the SP (State Pension) that you have already earned.

    In your case you have already earned 141.31 up to 5th April 2017. Therefore, 141.31 + (4.56 x 4 years)= 159.55.

    You only need 4 more years, unless I am missing something. Maybe the year under investigation was included in the 141.31 and is messing the figures up?
    Last edited by Simple Soul; 31-03-2018 at 7:20 AM.
    • GunJack
    • By GunJack 31st Mar 18, 8:15 AM
    • 10,371 Posts
    • 7,768 Thanks
    GunJack
    • #4
    • 31st Mar 18, 8:15 AM
    • #4
    • 31st Mar 18, 8:15 AM
    ..or, the number of years include getting to the new uprated value of SP (3% uplift due from Apr 18, CPI), but the value is still listed as 159.55 maybe...there was some discussion of this type of reporting error in the last week or so, where the 159.55 can't be changed until after the increase has been applied.

    There's 2 possibilities for you DQ
    ......Gettin' There, Wherever There is......
    • Linton
    • By Linton 31st Mar 18, 8:33 AM
    • 9,748 Posts
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    Linton
    • #5
    • 31st Mar 18, 8:33 AM
    • #5
    • 31st Mar 18, 8:33 AM
    I guess it is the year under investigation being included in the 5.
    • Tom99
    • By Tom99 31st Mar 18, 8:47 AM
    • 2,645 Posts
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    Tom99
    • #6
    • 31st Mar 18, 8:47 AM
    • #6
    • 31st Mar 18, 8:47 AM
    Is it that you have 5 more years to SPA rather than 5 more NI years needed?
    • DairyQueen
    • By DairyQueen 31st Mar 18, 9:05 AM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    • #7
    • 31st Mar 18, 9:05 AM
    • #7
    • 31st Mar 18, 9:05 AM
    Thanks all.

    I also calculated the shortfall as 4 years (at 4.56 p.a.).

    Good news = my math is right.
    Bad news = forecast may be misleading.

    Add the soon-to-end-current tax year, plus the year under investigation (I know I paid sufficient NI) and, as of 6th April this year, I will be 2 years short of full nSP qualification with 7 years to go.

    Conclusion: don't rely on the summary forecast. Always check the NI breakdown, and especially before making any voluntary contributions.
    • DairyQueen
    • By DairyQueen 31st Mar 18, 9:19 AM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    • #8
    • 31st Mar 18, 9:19 AM
    • #8
    • 31st Mar 18, 9:19 AM
    Another quick question for the the experts please:

    I last communicated with DWP and HMRC about my NI contribution record over a year ago. There are several inconsistencies between their records and my record of employment and contracting-out. Most of these inconsistencies won't affect my SP. The year 97/98 will have an impact. It has now been 'under investigation' for two years.

    Has anyone any experience of how long it takes for these issues to be resolved? I'm not losing any sleep over this at the moment (over 7 years until SP age) but HMRC promised a written response 'within 6 weeks'.... ahem.... a year ago.
    • LHW99
    • By LHW99 31st Mar 18, 2:44 PM
    • 1,446 Posts
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    LHW99
    • #9
    • 31st Mar 18, 2:44 PM
    • #9
    • 31st Mar 18, 2:44 PM
    If their timescale was 6 weeks and you have given them 52, I would chase again!
    • Simple Soul
    • By Simple Soul 2nd Apr 18, 4:40 AM
    • 48 Posts
    • 31 Thanks
    Simple Soul
    In your case you have already earned 141.31 up to 5th April 2017. Therefore, 141.31 + (4.56 x 4 years)= 159.55.
    Originally posted by Simple Soul
    I have had another thought. Your particular calculation (above) is very, very, unusual in that it works out at EXACTLY 159.55 p.w. (I.e. the full NSP).

    159.55 p.w. divided by 35 years = 4.56
    Or, more exactly: 4.558

    What if some silly billy at the DWP used 4.558 rather than 4.56 in the calculation?

    The result, in your case, would be that you would need 5 years to reach 159.55 p.w.
    Because, if you only contributed 4 years, you would be short by one penny.

    I suggest you ring the helpline number, provided at the bottom of the State Pension Forecast, to verify this.
    • DairyQueen
    • By DairyQueen 2nd Apr 18, 8:33 AM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    Jeez, I never considered this possibility. Given the issues I have experienced with HMRC's reconciliation of my NI record, nothing would surprise me.

    I wish I had made a copy of previous online forecasts as I think they changed my starting amount at one point. I wonder if that could have triggered a rounding error?

    Thanks for the very helpful replies everyone.
    • Simple Soul
    • By Simple Soul 3rd Apr 18, 5:46 PM
    • 48 Posts
    • 31 Thanks
    Simple Soul
    I don't think it is really an error. It is just more exact.

    At any rate, if this is the reason for your discrepancy, it should completely resolve itself as soon as the new maximum SP comes into play, probably in a few days time.

    Let us know whether or not it does.
    Last edited by Simple Soul; 03-04-2018 at 6:04 PM.
    • DairyQueen
    • By DairyQueen 3rd Apr 18, 7:03 PM
    • 482 Posts
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    DairyQueen
    Will do, and thanks again.
    • missile
    • By missile 3rd Apr 18, 7:10 PM
    • 9,691 Posts
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    missile
    When I asked for a forecast, DWP suggested if I make X contribution I would get 159.55.
    I couldn't reconcile their figures and decided not to.
    Turned out I was right and got the full NSP after all.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • DairyQueen
    • By DairyQueen 3rd Apr 18, 7:32 PM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    The records they originally held for me were a real dogs-dinner. I've been through them with a fine tooth-comb and wrote a letter providing chapter-and-verse of my employment, contracted-in/out status, name of pension scheme, type of pension scheme, employment dates, blah de blah. Thank goodness I am so anal that I hoarded decades of payslips.

    For example, on two occasions I had left employment after reasonably short periods of service and had my pension contributions refunded. The organisations in question did not subsequently pay the additional NI then due to HMRC. I was still recorded by HMRC as contracted-out for those periods when I should have been contracted-in. I had to contact both pension scheme administrators to ask them to set the record straight with HMRC.

    Another company i worked for was taken over during my period of service. I was already a member of the subject company's DC scheme. The new umbrella company then replaced the DC with its corporate DB scheme but I was ineligible for entry to the latter because I was under entry age. Despite this, from that point forward, HMRC had me recorded as a member of both schemes at the same time. I had never been a member of the latter scheme.

    I could carry on but I don't want to bore the forum. Suffice to say that the issues are still not resolved. My nSP starting figure was changed at some point but I don't know why as HMRC have yet to communicate with me.

    I would definitely recommend that everyone checks their history of employment and contracting in/out held by HMRC. In my case there were five errors.
    Last edited by DairyQueen; 03-04-2018 at 7:33 PM. Reason: Typo
    • Simple Soul
    • By Simple Soul 11th Apr 18, 5:24 AM
    • 48 Posts
    • 31 Thanks
    Simple Soul
    Correction
    The new maximum SP(State Pension) is now showing on my online SP forecast, namely: 164.35.

    I did a quick calculation using your figures and I think I may have been wrong about your discrepancy resolving itself when the new maximum SP came into play.

    I think that your figures will now be showing that you need another 4 years to get the maximum, instead of the 3 years that you think should be the case.

    However, the reason for the discrepancy is the same. The following is copied from online gov.UK on how the SP is calculated:

    " Each qualifying year on your NI record after 5 April 2016 will add ABOUT 4.70 a week to your new SP. [But] the EXACT amount you get is calculated by dividing 164.35 by 35 & then multiplying by the number of qualifying years after 5th April 2016."
    (Capitalisation is mine.)

    164.3535 years = 4.6957
    • DairyQueen
    • By DairyQueen 11th Apr 18, 8:10 AM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    Thanks for the update; much appreciated.

    It would seem that a rounding error may be depriving me of a year on my record. This appears to be confirmed by the discrepancy between the summary (5 years needed from Apr 2017) and the NI record (number of full years accrued displayed as 31 and the detail reconciles to this figure). The 31 excludes the recently ended tax year, plus there is one year 'under investigation'.

    (Sigh)

    Looks like I need to call HMRC again and query this. I think I have paper records somewhere but I doubt I will be able to reconcile those to either a) my current projection or b) HMRC's current record of my employment and NI history.

    It's like drawing teeth.

    I would love to know the algorithm used to calculate the COPE amount. This seems to be a closely guarded secret. Wonder why?
    • zolablue25
    • By zolablue25 11th Apr 18, 8:28 AM
    • 1,585 Posts
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    zolablue25

    I would love to know the algorithm used to calculate the COPE amount. This seems to be a closely guarded secret. Wonder why?
    Originally posted by DairyQueen
    Xylophone posted this link in another thread on COPE https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

    It may help.
    • DairyQueen
    • By DairyQueen 11th Apr 18, 8:35 AM
    • 482 Posts
    • 780 Thanks
    DairyQueen
    Excellent! Thank you. I am rushing straight there
    • Simple Soul
    • By Simple Soul 11th Apr 18, 1:10 PM
    • 48 Posts
    • 31 Thanks
    Simple Soul
    No Error

    It would seem that a rounding error may be depriving me of a year on my record. This appears to be confirmed by the discrepancy between the summary (5 years needed from Apr 2017) and the NI record (number of full years accrued displayed as 31 and the detail reconciles to this figure). The 31 excludes the recently ended tax year, plus there is one year 'under investigation'.

    Looks like I need to call HMRC again and query this. I think I have paper records somewhere but I doubt I will be able to reconcile those to either a) my current projection or b) HMRC's current record of my employment and NI history.
    Originally posted by DairyQueen

    Sorry, but as I said before, your original discrepancy (if caused by calculating using 4.5585 rather than 4.56) IS NOT A ROUNDING ERROR.

    There is NO error. If anything, it is more correct. They are doing exactly what they said they would do on the tin (please re-read the quote I copied-out in my last post: #16)

    I think you are getting confused because you are trying to tackle too many issues at once. I am not talking about your multitude of discrepancies with your employment history, I am only addressing your original query at the start of this thread.

    It was very straightforward. You and I both calculated that you should have had to pay 4 more years for a full SP (State Pension) if 4.56 was used in the calculation. But, your SPF (State Pension Forecast) said that you needed 5 more years.

    That was a few days ago, & we are now in a new financial year. To be clear, please confirm that your new SPF now says that you need 4 more years for the maximum SP, but if calculated using 4.70, it works out at 3 years.

    In your post (copied & pasted immediately above) you still seem to be quoting last year's financial figures ("5 years needed from Apr 2017"). Is that because your SPF has not yet updated itself to include the new maximum SP? (Mine has.)

    Let's start by getting and using the new figures, because you appear to be bringing too many different issues into the mix, and getting into a muddle.

    Even if your original discrepancy is still there (I.e. on your SPF showing the new financial year's figures), I do not believe that it is an error. You have NOT been deprived of a year. All it means is that, instead of getting the full NSP (New State Pension), you will get 1p less. That is not a big deal.

    You can, of course, pay 700 odd, for the final year, and get the full NSP, but it would not be cost effective. It would, in effect, be paying over 700 for an extra 1p a week, or 52p a year. Even if you lived for another 50 years, you would only have received, in today's money, 26 extra.

    If I have got any of the above wrong, I am sure someone will correct me. You should also, of course, keep thrashing it out with HMRC just to be sure I have not got it all wrong (I am far from being an expert).
    Last edited by Simple Soul; 11-04-2018 at 2:01 PM.
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