State Pension higher than I thought

[VanessaShanessaJenkins99]

I am hoping someone can shed some light on my dads state pension situation- he is 66 in January and will be retiring - i helped him apply for his state pension online and he has received a letter telling him what he will be getting - at the end of January it will £936 and then every 4 weeks it will be £974 - it doesn't say anything else on the letter other than that - we thought the state pension was 221 per week paid every 4 weeks? I dont want him to be receiving this amount and then it turns out its wrong and him have a massive bill to repay 🤔

That is retired early with private pension, I received my SP at 66

Mine is £929.20. 35+ years of ni, turned 66 June 24.

His pension will be higher because of SERPS - mine is.
I'm just coming up to 66 and mine will be £239 per week (when it arrives), that's because I have some extra added for SERPS from the days when it was a "thing". I did nothing to get SERPS, it was obviously added during those years without my realising. I never had a private pension at all so it isn't due to that.

SERPS is nothing to do with being contracted out. If anyone pays into a private pension during their working life, they are 'contracted out' during that time so their state pension is slightly smaller when it's drawn but obviously there's also the private pension too (drawn and paid separately), which makes the total amount received overall larger.

Just saying, as some pp seem to be confused over the two things.

SERPS is nothing to do with being contracted out. If anyone pays into a private pension during their working life, they are 'contracted out' during that time

This is completely wrong. You could previously choose to be contracted out of the additional State pension element (which was SERPS at one point; it had other names). You either paid a lower rate of NI or part of your NI contributions were diverted into a private pension.

Contracting out is no longer possible and paying into a private pension doesn’t, and never did, mean you were contracted out unless you chose to be so (or your workplace pension was contracted out)

Anyone of state pension age with an illness can apply for this
It is not means tested

www.gov.uk attendance-allowance

Correct link

https://www.gov.uk/attendance-allowance

You're right that the additional pension (SERPS etc) closed in 2016 and that, surprisingly to many, contracted out years do not count in full for the new pension.

I very much doubt that somebody who would have got more than £221.20 taking into account the State Second Pension will lose that money; there will be some sort of process so that you get the better of.

The 'thirty five years for a full state pension' is irrelevant if you were born in the last century - it only applies if you started your working life since the introduction of the new State Pension on 6th April 2016. At that point everyone who had NI contributions prior to then had two individual calculations done for them, under both the old and new scheme rules, using how many NI years they had, whether they had been contracted in or out etc, SERPS comtributions etc. The higher of the two amounts became your 'starting amount'. Every NI year creditted since then will have added 1/35th of the new state pension amount to that starting amount until the maximum (currently £221) is reached or you get to State Pension Age, whichever is sooner.

The upshot of this was that some people now needed more or less than 35 years to reach the amount (and some don't have time to reach it at all) - anything from 29 to 50 years, with those who were contracted out typically needing the most.

Your individual state pension forecast will show you exactly how much you are currently entitled to, how much (if anything) you can increase it by, and how many more years you need to contribute to do so
Check your State Pension forecast - GOV.UK

There are so many permutations of contracted in/out, gaps in NI history etc that the only way to understand it is to get on the web and check both your contribution history and pension prediction.

I was contracted out from 1978 until 2013 and then had a year where I chose not to work before picking up part time stuff from 2015 on.

As at 2019 I had fewer than 35 years in the new scheme, even though I'd paid been credited with NICs since I was 16. However I was predicted to have enough for the full £221.20 if I continued to pay (or be credited with) NI until 2025 when I'm 66.

The gap would have been bigger but in the seventies 16-18 year olds were credited contributions.

The misconception that, once you've paid in for 35 years, you'll get the full amount is widespread.

I'm not sure exactly how long I was contracted out for but to get full pension I would have needed 43/44 years

@VanessaShanessaJenkins99 definitely log onto the Government Gateway and check the breakdown.

It sounds like your Dad was contracted in to the state pension. In 2016 for everyone under state pension age DWP calculated their entitlement to the “old” state pension. I suspect at this stage your Dad had an entitlement to £243.50 per week. As this was higher than the new state pension this rate was preserved and that is what he will now receive each week.

The reason for the lower first payment is likely to account for his birthday falling part way through the week so it’s a partial payment to get him onto the right 4 week schedule.

Another anomaly, is that although I was contracted out when working, so got no credits, I DID get credits when I wasn't working due to looking after children and claiming child benefit! Crazy bonkers system.

Yes the first payment is generally lower and they pay it according to the last 2 digits of your NI no. so you may miss out on a few days pension from your birthday because of this as they use the NI no. day after your birthday.

'Contracting out' only meant you didn't contribute to SERPS or the Second State Pension- you still got NI credits towards the basic state pension providing you earned above the Lower Earnings Limit (currently £123 a week) even though you don't actually start to pay empolyee NI until you are earning over the Primary Threshold (currently £242 a week)

The rigmarole continues...... We have applied to change his paper Licence to the photo one so they have said they will send something in the post - im presuming something to do with the actual photo as at no point did they ask for one on the application!
My email got bounced back as undelivered ! - i have tried to find out other ways of contacting them but its either post or phone! My dad is as deaf as a bat so the phone call would be an absolute nightmare!
So i think we just have to wait until the new photo card driving license is here hopefully in the next few weeks and then go from there.

Yes, I think the first photocard driving licence is a palaver if you haven't got a passport to take the photo from and prove your identity, I think you may have to go to the post office with your form and they may or may not take the photo, not all POs do it so you will need to check which one if you have to do that. At least he will have a proper id then so it will be easier for you to help.

They are probably sending you a pack for a postal application which you can also do if you haven't got a local post office.

Anything that helps us get this sorted is a bonus - hes had the licence since the summer of 1976 and has kept it pristine bless him, its amazing how hes gone this long without it ever being an issue to be honest! Especially as its not like hes had a passport to prove his identity as hes never left the country!

okay sp I'm a bit confused by this. I was contracted out for many years. With no NI contributions whilst on maternity leave. My state pension forecast shows the full 221 pw if I contribute until I'm 66. does this mean I'll actually get the full amount or will I be in for a shock when I retire (assuming this happens at age 66)

As long as you have full NI years between now and 66 you will get the full “new state pension.” No surprises. If you received SMP then Child Benefit you should have received credits.

My advice is each January check your state pension forecast. This way you can check you are still on track. It’s much easier to resolve any problems when they occur rather than when you are due to get your pension.

That's exactly consistent with my experience after being contracted out form 1978 to 2013. Needed quite few more years to get to the full £221.20 but will just squeak it if it do another year until I'm 66.

Ring the future state pensions dept and ask for a forecast, it should show NI payments/years and the years contracted out. I thought I had enough NI payments to cover my SP but the 12 years I was contracted out made it look very confusing. I spoke to them & they advised me I was around 6 years short for a full sp so I bought the extra years. You can also claim credits if you're a carer for someone with a registered disability in receipt of benefits or back claim using home responsibility protection is child care.

Your dad may have paid extra contributions at some point. Go onto the Government Gateway, it will show you exactly what he paid each year and how many years of full contributions he has and what he is due weekly.

You don't need to ring them (unless you don't have the right id to set up a Government Gateway id).
Assuming you are currently under state Pension Age, you can just go online to get your State Pension Forecast
Check your State Pension forecast - GOV.UK

@P00hsticks This is my current state pension forecast from the government gateway which seems to imply I will get full state pension now at age 67 regardless of having been contracted out. I have worked full time since 1991 apart from a few years at home looking after small children for which I have got HRP qualifying years. I also seem to have been given qualifying years whilst a student. I will likely continue working full time for at least 5 more years but this says that I can't improve my forecast any further. I had just assumed that I wouldn't get full state pension due to contracting out for so long. Am I reading this forecast correctly?