Reading the sad story of another thread has made me wonder about mine...
Having a number of private pensions through various employers, I don't know what I'm entitled to from state, if I make it that far...
I believe a some points I've been opted out. How do I find out, and is it worth me trying to buy years? How?
Speak like I'm an idiot 
How old are you, and when do you reach state pension age?
As I tried to explain in the other thread, if you have been
ever been opted out in the past, then it is very unlikely that you'll currently qualify for the full new basic SP of £155 - Deductions are applied for the years you have been opted out. These deductions are heafty. There is no simple way to calculate it, and the only people with the figures are DWP/HMRC.
In general, if you have ever been opted out it is best to assume that you are currently (as at 5/4/2016) entitled to (NIyears/30 * £115). From now on, you will accrue more pension at a rate of £4.45 per year up to the maximum of £155 p/w. So, providing you will have 35 years NI by SP age, and you will work for at least another 8 years from now, then you should build up to the new £155 p/w max.
The £155 is in addition to whatever private/works pension you have built up. If you are currently on target to to qualify for the £155, then there is no point in buying additional/missed NI years.
Final salary/defined benefit pensions are usually best left well alone. They are a promise by a previous employer to pay you a certain amount of money when you reach their scheme retirement age (could be 60/65/SP age). Once you leave that job, the benefit you have built up isn't 'frozen'. Its calculated at your leaving date, and then grows by a fixed percentage per year - can be RPI, CPI or a fixed percentage. There isn't a pot of money associated with your benefit - but the employer may offer you a 'transfer value' to try and get rid of you as a liability. It is rare for these transfer values to represent good value so it is important that you take qualified financial advice before you contemplate it - indeed in many cases it's now a legal requirement that you pay for the advice before the transfer out is allowed.
Defined contribution schemes are a pot of 'money'. The money is not cash though - it's usually invested in stocks/shares/bonds/funds. The idea is that it's value grows as the stock markets grow, since historically the stock market grows faster than cash+interest. The important thing is to minimise the costs associated with these pots of money - there are often fees of anywhere from 1% to 5% per year on the schemes, and that dramatically reduces the amount of growth. It is possible to get sub 0.5% fees if you take control of your own investments, but it's also possible to oops it up very badly if you chose the wrong investments.
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Topic: Pension Pt2 (less important!) (Read 4705 times)