Barbes wrote:1) Current forecast is £121.87
2) COPE is £7.43/wk
3) 23 full years to 2015-16
4) 1 full year since 2016-17 (2020-21 - not recorded yet but we know to be the case)
5) Part full years are 2014-15 (£616); 15-16 (£492.80); 16-17 (£800.80); 17-18 (£800.80); 18-19(£800.80); 19-20 (£435)
Barbes wrote:1) the estimate is dated 5/4/2020
2) the most is £175.20 if 11 further full years are made before 5/4/2033.
Ok, well the second part tells us that they have yet to update the site for 2021/22 figures, and confirms that she will be able to get a full new state pension, although as we'll see she has a variety of paths to that. So, are you sitting comfortably?
The transition from the old to new state pension systems for folks that have qualifying years before 6-Apr-2016 but will be retiring on or after that date is implemented by calculating a "starting amount" for them at that date. This is basically the higher of how much they'd have got with the old system if they'd retired at that date and how much they'd have got under the new system less a deduction for having been contracted out.
Now, the twist in calculating this is that of the figures that you have, the headline ones (£121.87 & £175.20) are for 2020/21 but the COPE figure is as of 6-Apr-2016. We could increase that to take into account the increases in state pension since then before sticking it into the calculation, but I'm going to do it instead by using all the 2016/17 numbers, 'cos that's what DWP do and if you ever have to talk to them about the starting amount it'll be the as-of 6-Apr-2016 figures they'll be quoting.
At 6-Apr-2016 the full Basic State Pension (old system) was £119.30pw after 30 years of contributions, which is £3.98pw for each year.
At 6-Apr-2016 the full New State Pension was £155.65pw after 35 years of contributions, which is £4.45pw for each year.
In 2020/21 the full New State Pension was £175.20pw after 35 years of contributions, which is £5.01pw for each year.
MrsB's new system pension figure to go into the comparison is 23 * £155.65 / 35 = £102.28, less COPE of £7.34 =
£94.94.
Now, as well as the BSP in the old system people also potentially had some Additional State Pension, and to calculate her old system figure for the comparison we need to know how much ASP she would have got at 6-Apr-2016, but we don't have that (DWP can tell you if you ask), however we can infer it.
So, we start off by calculating her BSP figure, which is simply 23 * £119.30 / 30 = £91.46.
We know that her current forecast is £121.87, and that that figure doesn't include any post-2016 full qualifying years, so it is in effect simply the 2016 starting amount revalued to 2020/21. So, let's deflate it back to 2016 figures by £121.87 * £155.65 / £175.20 =
£108.30.
As £108.30 is higher than the 2016 NSP figure of £94.94, that means that her "starting amount" was based on the old system, and included £108.30 - £91.46 BSP = £16.84 of Additional State Pension.
Ok, so we now know that at 6-Apr-2016 she had accumulated £94.94 under the new system and £108.30 under the old. It's all down hill from now.
If she fills 2014-15 and/or 2015-16 that'll add £3.98 for each year to the old figure and £4.45 for each year to the new, and if you try that you'll see that her 2016 starting amount will still be higher under the old system for both cases, increasing to £112.28 for filling one of those years and £116.25 for filling both of them.
Let's now reflate those to 2020/21 figures, by multiplying both by £175.20 / £155.65, getting us £126.38 and £130.85 respectively, which is what the forecast would have said (instead of £121.87) if she'd already filled one or both of those pre-2016 years.
Now, in 2020/21 figures, adding further years from 2016 onward adds £5.01 per year filled, and she can keep adding those until she reaches the full new state pension amount, or she reaches state pension age, whichever comes first.
This is where we can now see that she has a variety of paths to getting a full new state pension. She could just simply ignore the past and fill each year going forward from now, adding the next 10 years to the 2020-21 one she's already got, and that'd be the best move if she thinks she'll be working for that whole time, as there's no point in paying for voluntary NICs for the past if the
involuntary ones she will be paying going forward will get her to the full amount anyway.
OTOH, if she thinks she won't be working that much, she can fill some/all of the past gaps to reduce the number of years going forward from now which she will have to make up, and I'll leave it as an exercise for you & her, and other readers, to figure out the cost-benefit of filling the partly filled and empty years she has available ...
Let me know if I've confused the heck out of you!
P.S. The full new state pension for 2021/22 is £179.60, should you want to reflate the figures to the current tax year.