Can someone explain why I don't get a full State Pension please?

Hello. I had to contact my local MP to investigate for me and he was excellent. They had not calculate correctly on the right basis that is. Eventually a higher up manager than the one originally involved calculated it on the correct basis increasing my pension fronm 200 a month to 750. The explanation given by the final manager involved was my assessment had probably been done by a person unfamiliar with the rules! There are multitudes of rules and none are necessarily what they seem to be and I have had multiple different opinions from the staff beginning with a flat refusal to even uphold what is written on their own web site. Once Damian Hinds MP questioned them I finally got some responsible people with some knowledge sit up and take notice.
Complain complain and use your MP otherwise you will just be exploited by people who dont know their job.

Haha now you know!

I don't understand why people think they have lost out by being contracted out as they paid less NI and tax, and their employer also contributed towards their company pension. It's swings and roundabouts in the end as my total income is more by being contracted out than if I had been contracted in. It was explained to me by a pensions expert that by not joining a company scheme you were in effect turning down a pay rise.

Thank you, Callistemon, I'll have to look into it.

I finished work when I was nearly 61 after working since I was 15( took 5 years out when I had my child) .
I don't get the full pension, the reason being is, I worked for the local city council and for about 6 years was contracted out, didn't know at the time it would affect my pension, so I lost about £14 a week.

Knitandnatter

Fleurpepper

You have just answered your own question. You should have worked until 66.

Yes, that's correct. I retired in 2016 aged 62 and I don't get the full SP despite contributing for the qualifying years. Seemingly, if you stop making NI contributions before you are eligible to claim SP you lose out. I could have 'bought' the extra payments but to be honest it wasn't worth the costly outlay for such little return.

Well, that seems very unfair if you have more than the required number of qualifying years.

If you had to stop work on medical grounds and received any benefits, even a minimal one, your NI stamp may have been paid.

Fleurpepper

You have just answered your own question. You should have worked until 66.

Yes, that's correct. I retired in 2016 aged 62 and I don't get the full SP despite contributing for the qualifying years. Seemingly, if you stop making NI contributions before you are eligible to claim SP you lose out. I could have 'bought' the extra payments but to be honest it wasn't worth the costly outlay for such little return.

Fairycakes

I'm concerned reading OP's dilemma as I gave up work in the early 80s to become a full time mum. My husband has been paying NI all along so I hope that covers me also. If not, I'm in trouble 😱

I don't know how it works now under the new scheme but under the old scheme you would receive 60% of the SP based on your husband's contributions.

Best to ask for a forecast.

Soozikinzi

My DH has a contracted out SP of £679.80 every 4 weeks because he was a teacher - it's a Government employee thing . He paid full NI for well over the required 35 years. He didn't actually choose that - all government employees are automatically classed as contracted out as far as I know . I do think it isnt widely publicised and comes as a bit of shock to some ! He gets his teachers pension as well so I'm not complaining but it is worth considering for those concerned coming up to retirement age in case they are budgetting for the full SP.

Yes, I was contracted out for part of my working life too - it states quite clearly on the annual letter how much is taken away each week!

You have a reduced pension because you stopped working and paying NI contributions before your retirement age. No matter how many years you worked the pension entitlement is calculated up to the day you reach pension age.
That seems totally unfair, JeanBoard as the OP states she has paid NI contributions for 46 years, well over the required amount to receive a full SP.

I'm concerned reading OP's dilemma as I gave up work in the early 80s to become a full time mum. My husband has been paying NI all along so I hope that covers me also. If not, I'm in trouble 😱

You have a reduced pension because you stopped working and paying NI contributions before your retirement age. No matter how many years you worked the pension entitlement is calculated up to the day you reach pension age. You can top up and pay for the years you finished work early. To recap you need a minimum of 33 years and need to be working up to the retirement age to receive a full pension. If you contracted out this amount will be reduced as you have the benefit of a private pension. Seems very unfair but that is the calculation used.

There is a parallel discussion about state pension inheritance for widows which is also affected by contracted out schemes.

karmalady posted this very useful link to a comprehensive article by a law firm which may help explain:

www.lcp.com/media/1150050/why-is-money-being-deducted-from-my-state-pension.pdf

My DH has a contracted out SP of £679.80 every 4 weeks because he was a teacher - it's a Government employee thing . He paid full NI for well over the required 35 years. He didn't actually choose that - all government employees are automatically classed as contracted out as far as I know . I do think it isnt widely publicised and comes as a bit of shock to some ! He gets his teachers pension as well so I'm not complaining but it is worth considering for those concerned coming up to retirement age in case they are budgetting for the full SP.

Susieq62

Crikey £800+ per four weeks! Lucky you! I get £698 ! But I was born in 1950 so have been paid for 12 years so not complaining really ! Just want to say we don’t all get the same do we?

Yes, I know! £200 per week 😯
For 30 qualifying years!
Not 39 years for women and 42 years for men as on the old SP
if you’re a woman born before 6 April 1950 or a man born before 6 April 1945

But then perhaps the poster had to wait longer than we did to receive a pension.

The whole system is unfair.

Very helpful thread. Big thank you AskAlice and responders, I now understand why I’m not in line for full SP in spite of 35 years’ NI contribs. Yes, it should have been made so much clearer! That said, as a youngster, as with so many, I wasn’t remotely interested - me old? lol!

2507C0

That's interesting. I definitely paid five years since 2016 but for some reason they no one can explain I do not get the full amount. It's a mystery. There's a lot of errors made when calculating state pensions but difficult to challenge because no one understands the rules.

Have you asked for a forecast or, if you're receiving your SP already, a breakdown of how the figure was arrived at?

what is galling is that if you are on pension credit you get the full amount...I was careful not to pay the reduced married woman payment as I wanted to have independent pension, then I paid full as well as private pension when that was introduced, then had to buy qualifying years to account for the time self employed..so I get the full state pension which is so small.I have no other income or pensions, but because I have savings (inheritance for house) ..it is the same amount as friends who hardly ever paid a contribution...because their savings are less. It doesn'y t reward contributions. Every other country (except Albania) pays a higher pension and they are all contribution based. The rules are too complicated, too vague and unfair.

Crikey £800+ per four weeks! Lucky you! I get £698 ! But I was born in 1950 so have been paid for 12 years so not complaining really ! Just want to say we don’t all get the same do we?

Yes, in my experience too the Pensions staff are very helpful and knowledgeable when you eventually get through (though I once nodded off waiting for someone to answer the phone). Ringing them is definitely the way to go - when I was coming up to retirement I found that letters, emails and online enquiries just disappeared into a black hole, never to be seen again. It was 2020 though, so perhaps things are different now.

Have you spoken to them on the phone, 2507CO? They are very helpful and should be able to explain.

That's interesting. I definitely paid five years since 2016 but for some reason they no one can explain I do not get the full amount. It's a mystery. There's a lot of errors made when calculating state pensions but difficult to challenge because no one understands the rules.

Because on a contracted out NI code Isummer you would have paid less national insurance than you would had you paid under a contracted in NI code.

The difference you would have paid into your company pension. Your employer would have made the sure the correct amounts were being paid as NI or into your pension scheme.

So many people don't understand the contracted out system. I dont think it is in operation anymore.

ie : £866.66

My SP is based on my ex-husband’s contributions, because I never had a paid job. I’m not complaining.
Btw, if your weekly pension is £200pw , your actual monthly SP is £200 x52 divided by 12.

Whiff

Isummer have you looked to see if you qualify for pension credit?

I am certain I don’t qualify as I have 2 private pensions so reasonably well off.