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Where Taxpayers and Advisers Meet

Contracted out deductions

Posts: 20
Joined: Wed Aug 06, 2008 3:34 pm

Contracted out deductions

Postby Bluefox » Mon Oct 01, 2018 8:36 am

My wife and I have both reached the state retirement age this year. I have been receiving my state pension for 6 months and my wife has just received a letter from DWP stating what her pension will be. We both spent a lot of our careers in the public sector and were thus contracted out during those periods. In my wife's case she was employed in the public sector from 1972 to 1999 and then from 2000 to 2013 she was self-employed. She has not worked and paid no NI contributions since 2013. I was employed and contracted out from 1978 to 2013 and from 2013 to 2018 I have worked for a small company where I was not contracted out and made contributions into a workplace pension scheme.

Based on the employment records, I would have assumed that either our state pensions would be very similar or that my wife's would be higher due to having been contracted out for fewer years. In fact, my state pension is around £15 per week higher than my wife's, which puzzles me. Can anyone explain why this should be the case? Is it because my wife was self-employed for 13 years, whereas I was always an employee? She earned enough to make a full NI contribution during her period of self employment.

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