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Where Taxpayers and Advisers Meet

State Pension Calculation

DJ314159
Posts:58
Joined:Wed Aug 06, 2008 3:34 pm
State Pension Calculation

Postby DJ314159 » Tue Sep 26, 2023 9:03 am

When calculating the 2016 starting amount for your state pension the part of the calculation under the old rules currently takes £156.20 and multiplies this by 'your number of full years' divided by 30.

For example, say you have 18 full years up to 5th April 2016. Then the calculation is (18/30) x 156.20 = 93.72

But there is a small amount added on for the number of those years that were NOT contracted out, we're talking pennies here. Let's say 15 of those 18 years were contracted out. My question is:

How does one complete the calculation for the 3 years that were not contracted out?

Cannot find the answer anywhere on the internet. Most people content themselves with the first part of the calculation (even those aware there is more), as it gets close enough for many, but it's not the exact figure that HMRC arrive at.
The difference is only pennies, but I would like the full calculation. Thanks to anyone who can help.

DJ314159
Posts:58
Joined:Wed Aug 06, 2008 3:34 pm

Re: State Pension Calculation

Postby DJ314159 » Wed Oct 04, 2023 12:12 pm

Apparently it's not HMRC who do these calculations, it's the Future Pension section or Pension Service section of DWP that do them. Would still like an answer to this. It would be a shame if the exact calculation has been lost in the bowls of computer software.


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