Page 6 | Can my pension forecast be right? Am I reading it wrong?

mumda · 01/02/2025 20:14

cocoloco23 · 31/01/2025 00:52

When you contribute enough, do your state pension contributions stop being deducted automatically?

Oh god no

rainbowunicorn · 01/02/2025 20:19

RosesAndHellebores · 01/02/2025 19:46

Are you? The statements come with caveats. Mine says the max and I cannot increase it. It then says it's a forecast and may differ if I have been contracted out. My NI record does not indicate the contracted out years and I do not have payslips from the 80s/90's. There were also different definitions relating to the contracted out schemes. Inwas contracted out 2004 to 2016 in the LGPS. I may have also been contracted out 1987/1989, 1991 to 1993, 1994 to 1996.

At one point a cope amount was quoted and I could work back from that that if I worked to 65, I would have a full entitlement. However, I didn't make a note of the cope amount and it has now disappeared.

I shall try to find time to ring the helpline on Monday. I am not persuaded I shall find out the definite answer until I actually claim my pension.

Show quote history

The amount of state pension you will get is the figure quoted if it says that you can't improve your forecast. It should say £221.20 (this will increase with inflation)
The COPE amount does not get deducted or added to this. The COPE amount was an estimate of what the private / workplace pensions that were paid into during the contracted out period would be expected to achieve to replace the second state pension. It has nothing to do with the new state pension.

Does your forecast look like the screenshot below?

Can my pension forecast be right? Am I reading it wrong?

RosesAndHellebores · 01/02/2025 20:24

Yes, except there's a caveat to say that the amount may differ if I have been contracted out and it's the contracted out years that can't be confirmed. My statutory pension age is 66, in 2026.

rainbowunicorn · 01/02/2025 20:25

RosesAndHellebores · 01/02/2025 20:07

I have. I don't agree with some of what you have ventured.

Show quote history

Fair enough, you agreeing or disagreeing. dosen't make the information I've given incorrect.

rainbowunicorn · 01/02/2025 20:36

RosesAndHellebores · 01/02/2025 20:24

Yes, except there's a caveat to say that the amount may differ if I have been contracted out and it's the contracted out years that can't be confirmed. My statutory pension age is 66, in 2026.

If you click through to how contracting out may affect you it shows examples. I have screenshot below. If your contracted out time was going to reduce your forecast then the forecast wouldn't say the full amount of £221.20. It would say for example £195 then there would be a further line showing how many more years you need before SP age. As yours does not have this it means that even though you were contracted out of the additional state pension your calculation at 2016 and what you have paid in NI or via benefit credits till now have been enough for the full new state pension.

RosesAndHellebores · 01/02/2025 20:40

Yes, that may tell me I could have enough by 2026, in my case. It does not confirm whether I'd have enough if I pack it in in 2025.

rainbowunicorn · 01/02/2025 20:47

RosesAndHellebores · 01/02/2025 20:40

Yes, that may tell me I could have enough by 2026, in my case. It does not confirm whether I'd have enough if I pack it in in 2025.

If you didn't have enough at the moment it would not say you can't improve your forecast. Once it says that it means you have enough NI stamps. If you had not got enough years there would be a further line to say how much the shortfall was.

RosesAndHellebores · 01/02/2025 20:50

Then why does it say it's a forecast and depends on things like contracting out?

rainbowunicorn · 01/02/2025 20:58

RosesAndHellebores · 01/02/2025 20:50

Then why does it say it's a forecast and depends on things like contracting out?

It will always say forecast so that if a government decide to change state pensions in any way they haven't made any guarantee. Something like that would have a very long lead time to roll through so wouldn't affect anyone retiring in the next 15 to 20 years at all.

With regards to why it says about contracting out and cope. This is just standard wording that everyone who has been contracted out. Some people will still have years to go before they have enough years. Their forecast will reflect this though.

Redrosesposies · 01/02/2025 21:42

I'm the same as you @RosesAndHellebores . I am due to get mine in May 2026 and have 48 years of full contributions but am 20p per week short of the full amount. I was contracted out but stopped work in 2020. It's not worth paying £795 to get more. It would take me 3975 years to get in credit.

I was contracted out into a DB pension. It would have given me a pension of £8000 or so at 60 but then clawed back £1500 when I got SP at 66. Thankfully I managed to transfer it to a SIPP.

My COPE amount was £43. I spoke to HMRC when I stopped work and they told me that it was just the figure they used to calculate your starting point and it would not be deducted from the forecast amount. It doesn't say that anywhere though so I'm still not quite convinced. I know I won't get any less than the basic SP of £170 so any more than that is a bonus😀

My DH gets his in October, his forecast is £218. He was contracted out for a lot longer than me and his COPE amount was over £90 but he's also got 48 full years of contributions. We both started work in 1976 at 16.

Brahumbug · 01/02/2025 22:04

RosesAndHellebores · 01/02/2025 19:46

Are you? The statements come with caveats. Mine says the max and I cannot increase it. It then says it's a forecast and may differ if I have been contracted out. My NI record does not indicate the contracted out years and I do not have payslips from the 80s/90's. There were also different definitions relating to the contracted out schemes. Inwas contracted out 2004 to 2016 in the LGPS. I may have also been contracted out 1987/1989, 1991 to 1993, 1994 to 1996.

At one point a cope amount was quoted and I could work back from that that if I worked to 65, I would have a full entitlement. However, I didn't make a note of the cope amount and it has now disappeared.

I shall try to find time to ring the helpline on Monday. I am not persuaded I shall find out the definite answer until I actually claim my pension.

Show quote history

Am I correct? Absolutely.

rainbowunicorn · 01/02/2025 22:05

Redrosesposies · 01/02/2025 21:42

I'm the same as you @RosesAndHellebores . I am due to get mine in May 2026 and have 48 years of full contributions but am 20p per week short of the full amount. I was contracted out but stopped work in 2020. It's not worth paying £795 to get more. It would take me 3975 years to get in credit.

I was contracted out into a DB pension. It would have given me a pension of £8000 or so at 60 but then clawed back £1500 when I got SP at 66. Thankfully I managed to transfer it to a SIPP.

My COPE amount was £43. I spoke to HMRC when I stopped work and they told me that it was just the figure they used to calculate your starting point and it would not be deducted from the forecast amount. It doesn't say that anywhere though so I'm still not quite convinced. I know I won't get any less than the basic SP of £170 so any more than that is a bonus😀

My DH gets his in October, his forecast is £218. He was contracted out for a lot longer than me and his COPE amount was over £90 but he's also got 48 full years of contributions. We both started work in 1976 at 16.

@Redrosesposies What do you mean by the following. Are you saying that you gave up a defined benefit pension of £8000 a year and transfered to defined contribution? That is quite unusual if so. It would be very hard to get anyone to advise giving up a DB of that amount for a DC. Also not sure what you mean by then clawed back £1500 when you got SP
I was contracted out into a DB pension. It would have given me a pension of £8000 or so at 60 but then clawed back £1500 when I got SP at 66. Thankfully I managed to transfer it to a SIPP.

DeepFatFried · 01/02/2025 22:37

cocoloco23 · 31/01/2025 00:52

When you contribute enough, do your state pension contributions stop being deducted automatically?

No

They are NI payments, and we contribute whenever we work. Towards pension, health , etc.

NoOneKnowsWhoYouAre · 02/02/2025 09:43

Maggiemargherita · 30/01/2025 23:45

I definitely don’t have 32 years. I wasn’t paying NI at 12!

Edited

Show quote history

This thread made me go back and check mine. I'm 46 and last year when I checked it 100% said I had enough years and didn't need any more to qualify. Today it is saying I need 9 more years!!

Chewbecca · 02/02/2025 09:48

@Redrosesposies

It's not worth paying £795 to get more. It would take me 3975 years to get in credit.

Are you sure about this? It sounds (very) wrong. What is the weekly increase you would get through paying a one off £795?

NoOneKnowsWhoYouAre · 02/02/2025 09:48

Mandoidi · 31/01/2025 00:00

To compare- I'm 44 and have 10 years left. 3 does seem short for someone our age.
But I'm confused because I have a 28 year history (1996-1997 to 2023-2024) and two of those years aren't full. So 26 fully paid in years with 10 left...am I contributing 36 years in total?

Yours is very similar to mine. I have a 27 year history and it wants another 9 years. But last year it 100% said I'd paid in full so they must have changed something. I started paying in 1994, but have 4 partial years.

NoOneKnowsWhoYouAre · 02/02/2025 10:11

OnGoldenPond · 31/01/2025 19:59

She doesn't need 35 years as she started paying NI before 2016. She needs 30 years contributions.

Show quote history

I started paying in 1994 and still need 35 years. Never been contracted out so that isn't correct

Redrosesposies · 02/02/2025 10:55

Chewbecca · 02/02/2025 09:48

@Redrosesposies

It's not worth paying £795 to get more. It would take me 3975 years to get in credit.

Are you sure about this? It sounds (very) wrong. What is the weekly increase you would get through paying a one off £795?

20p

Choux · 02/02/2025 11:04

@Redrosesposies maths is slightly out but her reasoning is correct.

20p rise per year would take 4,000 years to be worth paying £795 for.

But 20p rise per week is about £10 per year. So still takes 80 years to recoup the £795 investment. Unless she is planning to live to 150 there is no point paying £800 to get 20p a week more!

Choux · 02/02/2025 11:13

Spectre8 · 01/02/2025 19:38

The only way to know is to log on and see your own statement and call them if you have questions.

Correct. The gov's own website does not make any statements about how many years are needed. It directs you to log on and check.

www.gov.uk/new-state-pension

There are several financial pages from companies, citizens advice etc who do quote numbers of years of contributions needed. But these are only generalised calculations so won't be right for everyone. So log on and check the official, personalised record.

Chewbecca · 02/02/2025 11:31

Interesting, I thought it usually added about £300 py. Is it because you are only 20p per week short of a full new state pension so that's the most you can improve by?

(It's a hot topic for me as I haven't got a full record and am no longer working!).

Redrosesposies · 02/02/2025 11:38

rainbowunicorn · 01/02/2025 22:05

@Redrosesposies What do you mean by the following. Are you saying that you gave up a defined benefit pension of £8000 a year and transfered to defined contribution? That is quite unusual if so. It would be very hard to get anyone to advise giving up a DB of that amount for a DC. Also not sure what you mean by then clawed back £1500 when you got SP
I was contracted out into a DB pension. It would have given me a pension of £8000 or so at 60 but then clawed back £1500 when I got SP at 66. Thankfully I managed to transfer it to a SIPP.

Edited

Show quote history

I appreciate it does sound odd but yes my (bank) pension forecast was for £8k a year but it had a clawback clause which meant that once I received state pension they would deduct around £1500pa so I would only get £6500.
To get that level of income now you would need a pension pot of less than £200k but my pot at the time was valued at 3 times that.
It took some time and effort to organise but it was worth it. It was a window of opportunity a few years ago on the prevailing financial situation (high bond prices and low interest rates) that myself and many colleagues took.
We have paid off all debts and future proofed the house. We have bought another house and did it up for our DC and family to live in. We have lived very comfortably for the last five years on withdrawals from the pot and I still have more than enough left to buy an annuity of £8k if I wanted guaranteed income.
The State Pension more than covers all our bills and we will use the pot for emergencies or luxuries, what's left is invested and continues to grow (although probably not so much with a labour government) and this way, when I die whatever is left passes on to my DH or DC.
Unless the Inheritance Tax rules change substantially or house prices double, my estate is unlikely to attract tax when I die, although I won't care.

I count myself very fortunate that this has worked out well for us. It's a far cry from those nights years ago when I would cry myself to sleep because I had to buy food on the credit card yet again and thought we would never be able to retire.

OnGoldenPond · 02/02/2025 11:39

@NoOneKnowsWhoYouAre you are right that it isn't as simple as I had thought. A post subsequent to mine outlined the complicated situation. Basically, when the new pension was brought in in 2016 a complex recalculation was carried out for those who had paid NI in previous years. Some years somehow counted multiple times! Personally I reached maximum contributions needed before 35 years

rainbowunicorn · 02/02/2025 12:14

Redrosesposies · 02/02/2025 11:38

I appreciate it does sound odd but yes my (bank) pension forecast was for £8k a year but it had a clawback clause which meant that once I received state pension they would deduct around £1500pa so I would only get £6500.
To get that level of income now you would need a pension pot of less than £200k but my pot at the time was valued at 3 times that.
It took some time and effort to organise but it was worth it. It was a window of opportunity a few years ago on the prevailing financial situation (high bond prices and low interest rates) that myself and many colleagues took.
We have paid off all debts and future proofed the house. We have bought another house and did it up for our DC and family to live in. We have lived very comfortably for the last five years on withdrawals from the pot and I still have more than enough left to buy an annuity of £8k if I wanted guaranteed income.
The State Pension more than covers all our bills and we will use the pot for emergencies or luxuries, what's left is invested and continues to grow (although probably not so much with a labour government) and this way, when I die whatever is left passes on to my DH or DC.
Unless the Inheritance Tax rules change substantially or house prices double, my estate is unlikely to attract tax when I die, although I won't care.

I count myself very fortunate that this has worked out well for us. It's a far cry from those nights years ago when I would cry myself to sleep because I had to buy food on the credit card yet again and thought we would never be able to retire.

Show quote history

@Redrosesposies thank you for replying. That's really interesting. It sounds like you definitely made the correct decision. I hope you don't think I was prying. Just a circumstance which would practically be unheard of in the current climate.

Redrosesposies · 02/02/2025 12:51

Chewbecca · 02/02/2025 11:31

Interesting, I thought it usually added about £300 py. Is it because you are only 20p per week short of a full new state pension so that's the most you can improve by?

(It's a hot topic for me as I haven't got a full record and am no longer working!).

@rainbowunicorn Not at all. The more information about these things the better as far as I am concerned.
You are right though. The financial climate is very different and you would be very lucky to find a financial advisor who would be willing or able to switch out of a DB pension now unless you had a substantial alternative source of income.
If I remember I will come back to this thread in October when DH gets his pension and let you know if he's a little or a lot short of the full amount.