A simple state pension question.....

[brman]

I should have done this years ago but I am now trying to understand my finances and what they will mean come retirement (which is getting closer than I would like...)

First step was the state pension. So, according to tax.service.gov.uk/check-your-state-pension I have 38 years of full NI contributions. It then says that, based on my NI record up to April 2019 I will get a pension of £151.78 and will need to contribute for another 4 years to qualify for the full pension of £168.60.
However everything else I read online says 35 years contributions should get me the full pension, so I should be there already?

What am I missing? I thought this would be the easy bit and I am already confused.....

[craig1912]

You’ve probably been contracted out of the state scheme at some stage. I’ve contributed 42 years but still need another 2 years for a full state pension. You should see something in the text around COPE if you have.
Also conditions changed in 2016 and you need so many years after that date. It is 35 QUALIFYING years and you need to understand what qualifying means

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

Edited by craig1912 on Thursday 30th January 10:49

Edited by craig1912 on Thursday 30th January 10:50

[brman]

craig1912 said:

You’ve probably been contracted out of the state scheme at some stage. I’ve contributed 42 years but still need another 2 years for a full state pension

Ah, thanks. Yes I was. It tells me....

The amount of additional State Pension you would have been paid if you had not been contracted out is known as the Contracted Out Pension Equivalent (COPE).

Contracted Out Pension Equivalent (COPE)
Your COPE estimate is£68.37 a week.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

[brman]

ok, I have been doing some reading. I had not realised that serps was now part of the basic pension. It all makes sense now

Thanks for the pointers!

[Simpo Two]

Hmm. A few years ago I contacted the DSS to check I'd paid all I needed to, and they said yes. Now, if the goalposts have moved, maybe I should check again. On the other hand, any extra payable for a full state pension, if now needed, might do better in my other financial machinery...

[craig1912]

/\
Suggest you read the link I posted- opting out is a factor as it’s deducted from your starting amount (of the new state pension at 2016). In fact it’s could be the biggest factor depending on your age and how long you were contracted out.
The link I posted gives all the information the OP needs

[brman]

unless I have missed something it does appear pretty straightforward from the link craig1912 gave. The key bit being.....

---

Valuing your National Insurance contributions and credits made before 6 April 2016
Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension.

Your starting amount will be the higher of either:

the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension)
the amount you would get if the new State Pension had been in place at the start of your working life
Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

---

This looks like the obvious reason my 38 years of full contributions does not yet get me a full pension.

[craig1912]

brman said:

unless I have missed something it does appear pretty straightforward from the link craig1912 gave. The key bit being.....

---

Valuing your National Insurance contributions and credits made before 6 April 2016
Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension.

Your starting amount will be the higher of either:

the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension)
the amount you would get if the new State Pension had been in place at the start of your working life
Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

---

This looks like the obvious reason my 38 years of full contributions does not yet get me a full pension.

and the sole reason why I have 42 years NI contributions burnt still need another 2 years to get a full state pension.

[brman]

anonymous said:

[redacted]

I don't suppose you have a link to info on that?
Everything I can find just refers to "years of NI contribution". No mention I can find on how large that contribution was or any connection to taxation levels.

[craig1912]

anonymous said:

[redacted]

It doesn’t - in some cases you don’t have to contribute anything (when claiming child benefit) to get a qualifying year.
For those employed (as against SELF-employed) you need to earn over £166 per week , which is below the personal allowance so tax doesn’t come into it at all.

[LeoSayer]

By the end of this tax year I will have accrued full state pension thanks to 35 years of NI contributions.

This is despite the fact that I would have been contracted out for at least 15 of those years. I don't understand how the starting amount was calculated.

[The Leaper]

LeoSayer said:

By the end of this tax year I will have accrued full state pension thanks to 35 years of NI contributions.

This is despite the fact that I would have been contracted out for at least 15 of those years. I don't understand how the starting amount was calculated.

Because you were contracted out of the State Earnings Related Pension Scheme, not the State Basic Pension.

R.

[craig1912]

The Leaper said:

Because you were contracted out of the State Earnings Related Pension Scheme, not the State Basic Pension.

R.

Nope you couldn’t contract out of the State Basic Pension anyway. The only one you could contract out of was the Additional State Pension (or SERPs as it was known at the time)

https://www.nidirect.gov.uk/articles/additional-st...

[brman]

The Leaper said:

LeoSayer said:

By the end of this tax year I will have accrued full state pension thanks to 35 years of NI contributions.

This is despite the fact that I would have been contracted out for at least 15 of those years. I don't understand how the starting amount was calculated.

Because you were contracted out of the State Earnings Related Pension Scheme, not the State Basic Pension.

R.

Ok, I am confused. The "additional state pension" is serps is it not? You cannot contract out of the basic pension. So I don't understand how leosayer gets full pension on 35 years of contracted out contributions when I don't with 38.

[craig1912]

brman said:

Ok, I am confused. The "additional state pension" is serps is it not? You cannot contract out of the basic pension. So I don't understand how leosayer gets full pension on 35 years of contracted out contributions when I don't with 38.

Agree - it’s confusing and I have 42 qualifying years but still need 2 more. It’s to do with the calculations at 6th April 2016, your NI history before then, your potential NI history after then, your age then and your official retirement age (when you actually qualify for the pension to be paid.

[The Leaper]

craig1912 said:

Nope you couldn’t contract out of the State Basic Pension anyway. The only one you could contract out of was the Additional State Pension (or SERPs as it was known at the time)

https://www.nidirect.gov.uk/articles/additional-st...

Isn't that what I said? You could contract out of SERPS but you cannot contract out of SBP.

R.

[The Leaper]

brman said:

Ok, I am confused. The "additional state pension" is serps is it not? You cannot contract out of the basic pension. So I don't understand how leosayer gets full pension on 35 years of contracted out contributions when I don't with 38.

"Additional Pension" is SERPS.

And I agree about leosayer.

And it is confusing, and it's about time someone with good communication skills sorted out the relevant government website!

R.

[Ian350]

I must admit to having a chuckle when I first saw the title of this thread - an oxymoron if ever there was one!

[craig1912]

The Leaper said:

Isn't that what I said? You could contract out of SERPS but you cannot contract out of SBP.

R.

It might have been what you meant but in the context of the original question that’s not how it read as brman read it the same way as me

[Chuggy]

....and just to complicate things, if you have other source(s) of income or maybe still working, you can delay or defer your pension to received an enhanced amount.

But don't die before it becomes payable.