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 🤔

@bigdecisionstomake That is only part of the forecast. Further down the page it tells you how many more years you need.

@Harassedevictee There is nothing else below the section I've screenshot except a paragraph about wanting to delay taking your pension. It used to tell me how many more years I would need but my NI record shows 35 full years (plus a couple of partial years) and the message has changed to say I cannot improve my forecast any further. It changed to this last year after I submitted my tax return and got the 35th full year added to my NI record so I'm assuming that means I've now qualified for full pension. My concern was whether or not the fact that I had some contracted out years would affect my pension, despite the fact this suggests I will get the full amount. I'm usually quite financially savvy but I find the state pension a little confusing.

I found it very confusing but it seems that if you were contracted out you need a good 40 odd years, for me it was about 44 years contributions to get a full pension, not the 35 which is the standard amount

That makes sense.

The fact you were contracted out has been taken into account so you will get the full state pension.

The wording is very smoke and mirrors as it states “should get” and that it is under the current rules which can change.

I can't see the forecast, but...

Up until 2010, everyone was automatically given NI credits for the years in whcih they turned 16, 17 and 18. This was so as to not unfairly discriminate against those who decided to stay in education at a time when you needed 44 years NI before you reached the age of 65 to get the full state pension amount if you were a man, and 39 years before you reached 60 if you were a women). They did away with these credits when they reduced the number of years needed in 2010.

The years between 1991 and 2016 where you will have contracted out will have meant that in April 2016 when they introduced the new State Pension and worked out your 'starting amount' there will have been a deduction under the new scheme rules, so the amount under the old rules ay have been higher and formed your starting amount. But contracted in and out was done away with at this time, and if you have been working since then, you'll have added another 8 years to your record, and each of those will have added (in current figures) £6.32 to your starting amount (that's 1/35th of £221.20). That's over £50.

So it;s quite possible that you have already reached the maximum achievable (as your forecast wil lsay, it doesn't let you off paying NI if you carry on working though!)

If you have registered for the government gateway in order to check your pension, then download the HMRC app. You can check your pension position and your current tax at a glance. Very simple way to check your national insurance is up to date and the pension forecast.

My Government Gateway account didn't/doesn't show the years I was contracted out, it merely said "year is full" for each of the 12 years contracted out so it appeared I had enough contributions for a full state pension. I had to ring future pensions to get the state pension statement showing actual "contracted out" years. I got this many years prior to retirement in order to work out how many years extra I'd have to work and make up the contracted out years in order to get the full state pension. I also spoke to them a few times and a couple of them were extremely helpful, knowledgeable & gave good advice. One was very dismissive and disinterested, I didn't have confidence in his advice at the time and was glad I remained dogged with it. It can be rather confusing if you straddle the two pension systems of old and new with the starting amount and formula that is used to work it all out.