Calculating New State Pension and Pension Worth More Than My Contributions

New State Pension

Claim the new State Pension

You can claim the new State Pension if you reach State Pension age on or after 6 April 2016. That’s men born on or after 6 April 1951 and women born on or after 6 April 1953.

If you were born before these dates you’ll get your State Pension under the old rules, If you don’t have a National Insurance record before 6 April 2016, you will need 35 years on your record to receive the full new State Pension when you reach State Pension age, If you do have a National Insurance record before 6 April 2016, we don’t just sweep away your record and start from scratch. You will transition from the complicated old system to the simpler new one. We look at how much you would have got under the old rules and how much you would get under the new rules as of 6 April 2016.

Whichever is the higher of these two amounts will be your ‘Starting Amount’. Your Starting Amount could be more or less than the full rate of the new State Pension, depending on your National Insurance record From 6 April 2016, for each year added to your National Insurance record you may add an extra £445 of weekly State Pension, until you reach State Pension age or the full rate of £15565 per week. It will provide a clear foundation for the future so you can build your personal savings on top of your State Pension to meet your retirement income needs.

Is my pension worth more than contributions?

You make contributions to the Plan on every pay and they might seem high to you, but having a steady stream of income in retirement is expensive.

So a natural question is: “Is my pension worth more than my contributions?” The answer to that is a resounding yes. As a general rule, the average retired member can expect their lifetime of pension payments to be worth at least 800% of their contributions. Here is how it works for members: You make contributions as you work and earn service. Once you retire, you can begin to receive a pension paid every month for the rest of your life. On average, within just 5 years of retiring, the total amount of those monthly pension payments received is equal to the contributions made by the member.

But remember it’s better than that because, over the course of an average retirement, a member will receive hundreds of pension payments. The average CAAT Plan member retires at age 62 and lives to age 90. That’s 28 years of pension payments. The cumulative value of a lifetime of pension payments after 28 years is more than 700% of a member’s contributions and the pension is paid for life, so it would continue as long as the member lives.

When you factor in the value of inflation protection increases and a lifetime pension for the surviving eligible spouse, the pension is even more valuable. On average, it is more than 800% of the contributions you made. This is an incredibly valuable benefit.


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