Let ’ s start with the basics : 1 . How much will I get ?
This will be dependent on how many years National Insurance ( NI ) contributions have been paid and / or NI credits have been received . The full new state pension is £ 221.20 per week if you have a combination of 35 years NI contributions and NI credits .
The equivalent annual amount is £ 11,541.90 but surprisingly this doesn ’ t equal 52 payments of £ 221.20 per week . That ’ s because the annual amount is calculated by dividing the weekly amount of £ 221.20 by 7 to get a daily amount (£ 31.60 ) and multiplying this by 365.25 . The 0.25 is to account for leap years .
If you have fewer than 35 years combined NI contributions and NI credits , then you will receive a reduced amount . For example , someone with 25 years will get 25 / 35ths of the full amount , someone with 30 years will get 30 / 35ths , but someone with 45 years will be limited to a maximum of 35 / 35ths .
You only start to accrue new state pension benefits when you have 10 years combined NI contributions and NI credits .
You can check how much you ’ ll receive by getting a state pension forecast using the following link https :// www . gov . uk / check-state-pension .
2 . Why don ’ t I receive the full amount ?
Apart from not having enough qualifying years , the main reason is if you were contracted out at some point . To understand this , we need to go back to 2016 when the new state pension was introduced .
Your National Insurance record before 6 April 2016 is used to calculate your ‘ starting amount ’. This is part of your new State Pension .
Your starting amount will be the higher of either the amount you would get under the old State Pension rules ( which includes basic State Pension and Additional State Pension ) or
the amount you would get if the new State Pension had been in place at the start of your working life .
Your starting amount will include a deduction if you were contracted out of the Additional State Pension as you were paying lower national insurance contributions than someone who was contracted in . It ’ s this deduction which can mean you will not receive the full new state pension .
A couple of other reasons why you may not receive the full new state pension is if you were self-employed as you were never part of S2P or SERPs and also women who paid the lower stamp so paid less NI contributions .
3 . What is COPE and should I take this off my state pension forecast ?
The pension you get from your workplace or personal pension scheme for the periods you were contracted out , should include an amount that , in most cases , will be the equivalent of the additional State Pension you would have got if you had not been contracted out . This is your Contracted Out Pension Equivalent ( COPE ) amount .
4 . How old will I be when I get the state pension and can this age change again ?
The state pension age for both men and women is currently 66 and increases to 67 from 2028 . It ’ s being phased in from 2026 . This phasing impacts those born between 6 April 1960 and 5 March 1961 who will reach their State Pension age at 66 years and the specified
number of months . And then is due to increase to 68 from 2046 , with again it phasing in this time from 2044 . You can get a state pension age forecast using this link https :// www . gov . uk / statepension-age .
And to answer the other question , could it change again , well the short answer is , yes , it could . In the Government ’ s latest quinquennial review of the state pension they assumed the state pension age would increase to 68 from 2039 and then to 69 in 2073 however these were just assumptions .
40 | The Adviser Online