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Full state pension?

Discussion in 'Retirement' started by Compassman, Aug 4, 2019.

  1. PeterQuint

    PeterQuint Lead commenter

    Firstly, thanks for your constructive response, and taking an effort to answer.

    Here’s the history.

    Yes, I signed up to the Government Gateway, I think around two years ago. I looked at my figure. To the best of my memory, I had a full, or nearly full pension.

    Now that didn’t sit quite right. I was contracted out of SERPS for around half my previous job, and (as is my understanding), effectively contracted out of most of my 25 years teaching, until the NI contributions changed around a year ago. I should have been missing a chunk, but I wasn’t, or didn’t appear to be.

    I decided I’d check back later, but left it. Then all of this current crisis hit, with my redundancy.

    At the start of the summer holidays I thought I’d check again. I had my ID, so I signed in with my usual password. It didn’t work. I clicked on the ‘forgotten password’ when that came up, expecting them to email me a link to reset it. Instead a message came up asking me to re-register.

    I couldn’t be bothered going through it all again just then, and then this thread came up, and I thought I’d ask.

    Because, you know, it’s a forum for people to ask questions about things they don’t know.

    Just to check, do I have to go through a whole story justifying every question I ask, as I’ve just had to do?

    Is that what we’ve become?

    My main question is this. Yes, I’d figured out the whole 34 years out of 35 bit. But I intend to work at least 6 more years. In one year I’ll have 35/35, so would be getting the full lot, EXCEPT I’d be short by the years I’d contracted out. But also I’d be working for five more years.

    So my question is this: in another year’s time, when I have 35 years in, will the following five years be ‘wasted’, or will those contributions be used to catch up the bits from the years I was contracted out? Do I need to spend money filling in the gaps, or will those five years do it for me?

    I thought it possible (though not certain) that someone may know the answer to that without checking.

    That’s why I asked.

    I presumed anyone who didn’t know the answer wouldn’t bother to answer, or possibly might say “Sorry, I don’t know”.

    But clearly that’s not what these forums are for.

    I suggest the mods create an automatic post. Anyone who posts a question, an automatic reply appears saying “Find out for yourself!”

    If anyone posts a second question, they’re automatically banned.
  2. phatsals

    phatsals Senior commenter

    If you were contracted IN for a number of years you would have earned some entitlement to SERPS. As such, you would have more than the basic 30 year entitlement, you would also have entitlement to more state pension,

    For example, if you were contracted IN up to 1997, you would have an additional (notional) £17pw SERPS, depending on your then income, pension, ie £125 basic pension plus £17 serps - £142 in total. This then would have become your foundation amount at the beginning of this new pension.

    Two calculations were carried out for those contracted out, a reduction from pre-1997 and a second from post-1997. These two figures were then taken off the new State Pension to provide your new entitlement. Your Foundation Amount is the better of the two, either 30 years old Pension, or new pension less Contracted Out reduction . So, if you were always contracted out it started at £155 less £35pw (the 2 reductions), giving a £120 foundation sum, or if you weren't always contracted out (say up to 1997), then it would be £155 less £17pw, a foundation sum of £138. This is all roughly based on having already got 30 years under old system.

    Because of this it is perfectly possibly your new pension is higher than you thought. In my case It translated to 32 years New Pension, and I only need pay 2 more for the full entitlement.

    PQ - please re-register and get your statement again, you've been very thorough with your plans thus far.
    PeterQuint likes this.
  3. catmother

    catmother Star commenter

    lardylegs likes this.
  4. applecrumblebumble

    applecrumblebumble Lead commenter

    It does not matter about the previous contracted out years but the next six will be helpful getting you closer to your new full state pension. Start on the basis of knowledge (re gateway) and go from there. I am currently on 47 years and I will not receive a full state pension when I retire but I am doing all I can to close the gap.
  5. PeterQuint

    PeterQuint Lead commenter

    It’s a hobby.
  6. catbefriender

    catbefriender Lead commenter

    @PeterQuint You could also ring the Future Pensions Group who will be able to provide you with the 'definitive':rolleyes: answer as to how much you have contributed to your actual full pension and how much more you will need to and whether making voluntary contributions will be in your favour etc. However, you may be ill-advised, or you may be lucky.

    I hope you get some clarify from them. Remember to

    a. go to the toilet before ringing
    b. make yourself a large mug of tea and
    c. have something on the laptop to watch whilst waiting for the phone to pick up and whilst they put you on hold to ask another person.

    If you off the phone within an hour, count yourself very lucky!:)

  7. applecrumblebumble

    applecrumblebumble Lead commenter

    Much easier to log into the gateway and get an up to date figure and projection, if you keep paying you NI until you reach state retirement date.
    PeterQuint likes this.
  8. catbefriender

    catbefriender Lead commenter

    He wants to know if it's beneficial to pay the extra year/s so it will be worth while listening to what the 'intellect' in the Future Pension Centre advises.
  9. frangipani123

    frangipani123 Lead commenter

    I went through all this, am registered with the gateway, have read widely about it etc etc. My forecast indicates that I will get a full state pension, and yet I have been contracted out for a few years, so that literally does not add up.

    Another issue, is that it is widely acknowledged now that the forecast given online is inaccurate, and quite a large number of people are retiring thinking they will get x amount based on the forecast, but are getting a significantly smaller amount.

    I've heard Steve Webb, the former Pensions Minister, discussing this on the radio and indicating that it seems to be a very large number of people, and will potentially be the next big scandal. He suggested that people ring the DWP and request a forecast in writing. Not sure if this will actually make a difference if there is an error. He has also written about it in various newspapers if you Google it.

    As for making up the contracted out years, I believe that making further payments that are non-contracted out will then help towards achieving a full pension. I started looking in to this around 4 years ago when it was really not at all clear.
    PeterQuint likes this.
  10. frangipani123

    frangipani123 Lead commenter

    Last edited: Aug 11, 2019
    PeterQuint likes this.
  11. PeterQuint

    PeterQuint Lead commenter

  12. catbefriender

    catbefriender Lead commenter

    @frangipaini123 Thanks for providing this. I did sense things were wrong, especially with the nonsensical,

    Your forecast

    • is not a guarantee and is based on the current law
    • does not include any increase due to inflation
    We the tax payers of Great Britain deserve much better than this! I was ill for two years on ESA and I noticed my NI records were not showing the NI credits due. I had to spent THREE months fighting both the DWP, who should have send the NI credits and the NI who should have placed it on my records and the only way it was resolved was by lodging a complaint with BOTH. They are skilled and passing you back from one to another and if I didn't notice it, I would be a further 2 years down as having incomplete years. I have some ancient NI forecasts which I will dig out and look over. I am sure they have made mistakes.

    As I said on another post, the Future Pension Group intellects telling us to just pay the missing years may not be in our interests because they really don't know how these figures are derived. The first thing that really stood out for me was the Future Pension Group tell you how many years you can pay back but can't take the payment. That rings alarm bells does it not? And the information between both the Future Pensions Group aka DWP and the HMRC NI helpline does not always agree and requires the customer to make it happen.

    Can we trust in this and successive governments to get it right in time for when we get to draw our pensions? This is why I believe in just getting as many years paid, on the cheap as you can, in the event of receiving surprises later on.

    And I predict, there will be more surprises. And this time the surprises will be telling people who thought they had more years paid, they actually have less.

    As I have said, I believe a lot of people are probably receiving less than they should in retirement, and a lot of people, after they add their private pensions and the state pensions together, will find that paying £749 those missing years, probably account to a difference of around 5p a week. The Future Pension Group does not tell people this. They just encourage you to pay as many years years as you can @ £749.
    Lara mfl 05 likes this.
  13. Prim

    Prim Occasional commenter

    Just a thought but if you have made a full 35 years by the time you are 55 then it would be advantageous to retire at that point as your contributions no longer have any impact upon your state pension? All of the contributions we make certainly drop our take home pay.
  14. catbefriender

    catbefriender Lead commenter

    There is no guarantee of this happening as the current law upon which this assumption is based may change.;)

    Probably will change.:(
    border_walker likes this.
  15. Prim

    Prim Occasional commenter

    But not immediately.
  16. catbefriender

    catbefriender Lead commenter

    Definitely not immediately, but let's hope when it does, a bigger effort is made to ensure EVERYONE affected knows.
    Prim likes this.
  17. catbefriender

    catbefriender Lead commenter


    Gotta call from HMRC from a SENIOR 'intellect' and it's sorted! I can pay the two years on the cheap and I got again a thank you from HMRC for pointing out an error in the training of their helpline and the DWP helpline staff i.e. them both giving out misinformation.

    With my former complaint of the DWP forgetting to transfer NI credits to HMRC for 3 years I was told at the time, over 1,500 people were affected.

    Because of my recent complaint, they will now be looking into payments made via the HMRC to see if people have been misquoted and paid £749 for years when they should not have had to. I reckon it's a lot of people because they were keen to grap the 2x £749 when I was on the phone.

    Yep it pays to be stroppy!:p

    And for the record, the weeks I DID pay NI does get knocked off, which is contrary to what the Future Pensions Group said and I actually paid LESS THAN 2 x £156 I was hoping to. So I am now around £9 better off a week for when I retire and have 2 years added on to the number of years I have been contributing.

    emerald52, diddydave, Prim and 5 others like this.
  18. Brianthedog

    Brianthedog Occasional commenter

  19. steveroberts61

    steveroberts61 New commenter

    The Tories are thinking of raising state pension age to 70 in 2028 and 75 in 2035. Apparently its to help people who would like to work longer!!!!!!!!!
  20. paulstevenjones

    paulstevenjones New commenter

    So will the TP be linked to it as is its stated aim at the moment! What a wonderful prospect it is to think of teaching at 75. Why even save for retirement when it’s that far off? And that unlikely?
    Lara mfl 05 likes this.

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