State Pension

A question about : State Pension

Having spent the afternoon looking at .Gov sites 'til I feel like screaming, I have then spent some time trawling through posts on MSE but have concluded I should post and hope someone can unscramble my brain.

I was made redundant at 60 (2013) and I am not working and not claiming benefits (house husband). My statement says I have 45 qualifying years of which I calculate 20 would have been contacted out. I am due to get my state pension in 2018.

I got a pension forecast in 2012 saying that my pension would be Ј120 p.w.

I have just obtained a new forecast that provides two figures (new rules Ј92 p.w./ old rules Ј135 p.w.)

Like with everyone I am trying to map the future and the following are my questions:

> Is there any way I can check the Ј92 as this seems low?

> Is the change from Ј120 to Ј135 accounted for by two further year's NI contributions (before redundancy) and any increases in state pensions?

> Am I right in assuming that in my case paying additional (voluntary) NI contributions is entirely inappropriate?

Thanks in advance

Best answers:

• Yes Ј92 is not low for someone who's had 20 years contracting out,in fact it looks high! People who've had decades contracting out will almost always be better off on the old rules calculation.
• Thanks folks, sounds like my plan is to bide my time now and then get a further statement once the new system is operating. Appreciate the help.
• What is of interest to you is the higher amount - you will receive at least this under the new system and may be able to buy credits after 2016 to get you closer to the full new state pension.
  Are you receiving a final salary pension at the moment?
  Presumably you have pre 88 and post 88 GMP - has the pension administrator clarified what will happen to increases on this part of your pension after you reach GMP age? (65).
• As others have said there is no reason to pay any extra NI before April 6th 2016.
  You should pay Class 2 voluntry contributions in 2016 2017 and 2017 2018 and if you can get away with it if you can pay a full year in 2018 2019.
  That would get you nearly to the flat rate pension.
  With regards to your existing system pension forecast and the difference over two years my best guess is the the orgininal 2012 statement was obtained too early in the tax year to get the second state pension updated and from the year before and your your recent statement had your 2011 2012, 2012 2013 and possibly your 2013 to later in 2013 when you were made redundant.
• Funnily enough I'm the same age, I was almost certainly contracted out from 1978-1997, and have 44 years contributions.
  My forecast from the e-service under the old system is Ј123.16, being 113.10 plus some ASP/GRB. .
  So I'm a very similar case. I've just last week sent off the written request for a forecast under the new system, and based on what I have seen reported by others, I won't be surprised if it is not unadjacent to Ј92!
• All of you that have been contracted out obviously will get a lower state pension because you have not made the extra contributions. Hopefully you're not expecting something for nothing!
  In addition those who contracted out no doubt made a contribution to your company or private pension so that will make up the supposed shortfall.
  So there you have it - we've all made similar contributions, to either our state or private pension and we all end up with a similar pension income when we retire. We're all getting what we've paid for, so we can all calm down and stop feeling hard done by!
  Cheers fj
• Presumably my pension knowledge and IT skills are comparable, as I hadn't subscribed so didn't know there were more posts hence my not thanking subsequent contributors. Anyway, in answer to xylophone, I am fortunate to be a member of a final salary scheme so I assume that GMP is not an issue.
  Bigfreddiel: I am not feeling hard done by and certainly don't need to calm down. I am simply trying to use MSE for help and guidance from those folk who understand these things and are willing to share that knowledge in a constructive way.
  As a mere mortal who skims over things I heard about the new pension, checked dates and thought it meant I would get the new amount. Subsequently the Government (politicians, don't you love 'em) said that they “simplified” the original announcement i.e. omitted to say that not everyone who appeared to be eligible would actually benefit from the full amount. I believe it was an FOI request that forced them to make another announcement.
  It is of course the case that for many of us these things are confusing and I am still unsure as to how I would know whether voluntary contributions would take me above the amount projected under the old system.
  Anyway, thanks for the helpful posts.
• It was clearly reported way back at the Green Paper Stage in 2011 that during the transition phase for some the single tier pension would be in part delivered through existing contracted out pensions. See this forum post at the time.
  This Steve Norris quote appeared widely across the press - the same papers by and large including the Daily Mail who have found this to be such a 'surprise' 3 or 4 years later. They don't search their own back copy.
  Actually the position is slightly better than 2011 in that then it wasn't clearly the case that post introduction of the new pension that further NI contributions could top up a foundation level to the full single tier value without considering past contracting out.
• Mea Culpa:
  I do not read green papers
  I consult MSE when I need help
  I listen to the headlines of the news
  The point is, when the BBC was trumpeting the "universal state pension" in 2014 and quoting a igure, no politician leapt into the debate and said "hang on folks what we said was this..."
  Anyway, moot point - I simply came here to seek help with my three queries!