Why is my state pension forecast reduced when it says have 40 years full contributions

[morelippy]

So confused.
Google says I need 35 years. I have 40 full years according to my gateway. My pension forecast is reduced and it says I have to pay more.

Stopped work at 55

I'm now 58

If I have 40 full years is this right?

You may have been "opted out" for some of the years and this need more years especially if you worked for local government or similar.
You will be able to buy extra years if you wish.
There is a government phone line you can use for advice.

Thank you @Blip

I worked all those years in the nhs.. I didn't opt out of anything, would they have done this do you know?

I have a minute nhs pension and will need my state pension to save my old age

It may have been a part of your NHS pension scheme that you were ‘contracted out’ of part of the state pension so you’ll just receive your NHS pension plus the reduced state pension.

I'll call them

I'm struggling to understand why 38 years continuous employment in the nhs hasn't earned me a full state pension tbh

A lot of part time years when the children were young (hence the small nhs pension) but even so.

As PP, prior to 2016, members of the NHS pension scheme were 'opted out' with the NHS pension expected to cover the difference between the part and full state pension payment.

faq.nhsbsa.nhs.uk/knowledgebase/article/KA-04464/en-us

If you have been given an opportunity to 'buy back' missed years of state pension contributions, this may be worth considering.

How are you funding yourself between now and state pension age? Can you return to work at all?

@JamMakingWannaBe that explains a lot, thank you.

What a bummer eh. Feels like a proper slap in the face. All those shitty weekend. And night shifts to keep working when the kids were little and we were broke, to end up with a tiny pension and a reduced state one to boot.

Completely burnt out so got out when I could and relying on OH. I'd rather clean public toilets than go back.

It will be due to being contracted out, I had a similar issue with the local government scheme. Buying extra years contributions is usually an excellent option for people in this position, I have done it and would urge others to do so. You get back the money it costs well within the first four years of retirement and after that it's all profit. Speak to the helpline for advice tailored to your situation OP.

And well done for checking, everyone needs to do this. 😊

I agree with the NHS pension being contracted out. While you were paying in to your NHS pension you were paying less NI.

You have options, buying more 'years' in NI contributions, you might be able to pay more years into your NHS pension, you can also start paying into a pension now and still get the tax top up from the government.

I had really good advice from pension wise.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

There was some sort of married women's opt out, could this have applied to you ?

I worked for a private company with a final salary pension (very similar to NHS) and was contracted out for a time , it was very common around about the 80s and 90s, I have 46 years contributions but haven't the full state pension, I think the private pension is supposed to compensate for this so you get the same amount or that was the thinking then.

Many people who worked in the public sector were 'contracted out' for the purposes of the state pension. They paid reduced amounts of NI but, by being in the pension scheme with their employer are often much better off than those who had no private provision or less generous work pension schemes. I worked in local government, I paid into that scheme and my employer also made contributions. I'm now retired, I am better off than those on an equivalent salary who either relied on only the state pension or who paid into another scheme. Do you have a forecast for your works pension, as we were provided a forecast every year?

The married woman's opt out was a bit earlier than OPs time I think, around about the late 60s and 70s.

The married woman's NI scheme ended in 1977 , no woman who married after that could pay the married woman's rate and those already paying reduced NI were advised to rethink.

Why did you retire so young?

I know how you feel check your NI record and ring the helpline and ask what years are best to buy back as some years won’t be counted even if you buy them back but the people on the phone are really helpful.

I am similar to you. As a teacher, I was contracted out. That meant we paid slightly less for our NI and therefore slightly more for a better occupational pension. I will have to have 44 years of contributions to receive a full pension.
OP, by deciding to stop work at 55, you’ve ended up with a smaller occupational pension plus a smaller state pension. You’re 58 now, won’t get your state pension for another 9 years so have plenty of time to get in a few more years NI contributions. You don’t have to work full time, as long as you earn over £242 a week.
Im afraid it’s no use complaining about the pension you’ll receive when it’s your choices that have led you to this position.

It is because Parliament doesn’t want people to retire especially poor people they want them all to work until they drop dead doing so so that they pay tax to fund their vanity projects and failures from the cradle to the grave at which point they’ll rob yours if you’ve anything to leave behind.

@morelippy if you worked all those years in the NHS how come your works pension is minute? Did you take your pension early and have an actuarial reduction?

I think you will be quite close to a full pension, you can see what you will get in the same place you checked your contribution years.

Quite possibly if you work another couple of years anytime between now and age 67 you will make it up to the full pension.

Hardly you have a golden NHS pension that you’ll have barley funded.

so loosing a bit of state pension is nothing

we’re all funding your pension.

Just to add it's not £242 a week you need to earn to get your stamp- it's the lower earnings limit of around £125 a week. At that level you don't pay NI but you do get a pension stamp.

Also if you are looking after grandchildren / nieces and nephews etc and their parents are getting child benefit as well as paying enough NI to qualify in their own right, then they could gift you their qualifying year(s). It is called Specified adult childcare credits. www.moneysavingexpert.com/family/grandparents-childcare-credit/#apply

Can anyone answer my burning question? I am 55 and have 36 years of contributions into the state scheme. 20 of those years were opted out.
A) how can I found out what actual impact that will have?
B) if I keep on working/pay for extra years nearer retirement, does that offset some of those years. If I keep on until retirement age at 67, I will have 48 years contributions. Which years do they use?

https://www.gov.uk/check-state-pension will show you. If you keep working, earning at least the lower earnings limit, for another 12 years then you'll have 28 years of full contributions. You need 35 as things stand to qualify for the full state pension. Were you claiming child benefit for any children under 12 during any of your 20 opted out years? If so, that should "top up" that year.

I contacted out from around 1998 when a started my pension to when it ended in 2016. Looking at my pension forecast it says I have another 5 years contributions to get the state pension amount of £203.85. Why am I not showing any adjustment for contracting out? However then in a seperate bit you click on about contracting out it has something about cope estimate £32.03 not being paid by government, does this effectively mean my state pension is reduced by this amount?

Phone the helpline