Pension Entitlement

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I have drawn my state pension for almost 5 years now, nearly all my employment was in a ‘contracted out‘ scheme. My ‘new state pension’ is therefore reduced, although I never did see the exact calculation rules for the reduction, it doesn’t seem to be publicised.

To give you an idea of the effect, I‘ll get about £10,500 in the next financial year, about 84% of the headline figure you see in the media, which is typically given as about £12,500. You should do better than me though, because the ability for schemes to be ‘contracted out’ finished in 2016. (IIRC)

I am contracted out, not due for my pension for a few years yet.
I find it very confusing.
It says on my state pension forecast:

Your forecast is £230.25 a week, £1,001.18 a month, £12,014.12 a year

Then you go onto

Contracted out of the Additional State Pension

Check if you were contracted out of the Additional State Pension and what it means for your State Pension

www.gov.uk

It says

If you reached State Pension age on or after 6 April 2016​

If you were contracted out before 6 April 2016, you might not get the full rate new State Pension of £230.25 a week.
An amount is taken off your new State Pension if you were contracted out. This is because either:

• you paid National Insurance contributions at a lower rate
• some of the National Insurance contributions you paid were used to contribute to a workplace or private pension

How much is taken off depends on how long you were contracted out and your earnings at the time. While you were contracted out, you were paying into your workplace or personal pension instead.

It's not really clear, but I have paid full NI contributions since I opted out (I think in the 80s) according to the gov.uk website.

What happens to the contracted out pension? I still receive an annual statement.

I assume my work pensions have no bearing.

Note: Any more replies on this, I'll request for the thread to be split.

To add. If you do not have 35 years contributions it can be very cost effective to pay to complete part years (as they do not count unless a full year is paid). I have seen some very cheap to buy years for

You can only do it for the last 6 years.

 

[jfollows]

“Contracted out” means that you and your employer paid less National Insurance in the past, or the money went instead to your employer’s pension scheme. See https://www.gov.uk/contracted-out