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SERPS: Why is my friend getting a bigger state pension than me?



I’m 67 and received state pension at 65. I have a full National Insurance record, but because I was contracted out of SERPS for 13 years I saw a large deduction.

I now receive £138.80 per week (£29.80 less than the full rate). This seems a high reduction for only 13 years, but I accept that my occupational pension exceeds the reduction.

A friend of mine has just retired at 65 years and six months. He was contracted out with the Teachers Pension Scheme for 21 years. His state pension has only attracted a small reduction of approximately £5 per week as he receives over £160.

Number crunching: Why is my friend getting a bigger state pension when he was contracted out much longer than me? (Stock image)

Number crunching: Why is my friend getting a bigger state pension when he was contracted out much longer than me? (Stock image)

Number crunching: Why is my friend getting a bigger state pension when he was contracted out much longer than me? (Stock image)

Is there an explanation as to why my friend has only had a small drop in his state pension, and I have had a much larger drop even though I was contacted out for fewer years?


Steve Webb replies: There are two main reasons why your friend is getting a larger state pension than you.

These relate first to the amount of state pension that each of you built up in the years when you weren’t a member of a workplace scheme, and second to the years of contributions that each of you has made since the rules changed in April 2016.

To understand in more detail what is going on, it may be helpful to recap on how the new state pension is calculated.

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

The first step in calculating the new state pension is to look at your National Insurance record as at 6 April 2016.

This gives you what is known as your ‘starting amount’ for the new state pension. The starting amount is the higher of two numbers.

The first is what you would have got under the old rules – a full basic state pension for 30 years or more of contributions plus any entitlement under SERPS – the state earnings related pension scheme.

The second is what you would get under the new rules – a full ‘flat rate’ state pension for 35 years or more of contributions minus a (big) deduction for years when you were in an occupational pension.

Because both you and your friend were in occupational pensions for a number of years, under the new state pension there is a big deduction for the years in which you were a member of such a scheme.

This is because of a process known as ‘contracting out’ where members of many workplace pension schemes paid less National Insurance into the system in return for a promise by their scheme to replace part of their state pension entitlement.

As a result it is likely that both you and your friend would have a ‘starting amount’ in 2016 based on the ‘old rules’ calculation.

Assuming you both had at least 30 years of contributions, you would each have had a starting amount which included the full ‘basic’ state pension (currently £129.20 per week) plus any earnings-related state pension for years when either of you were not members of a workplace pension.



From what you have told me, I think your friend would have already built up more state pension by 2016 than you, perhaps because he earned more than you in the years when he was not in the Teachers Pension Scheme.

However, the other big difference between the two of you relates to the second step of the calculation.

Once your ‘starting amount’ has been worked out, any extra years of contributions from 2016/17 onwards would add 1/35 of the full flat rate state pension to your starting amount.

With a full flat rate state pension of £168.60 at current rates, each extra year would add around £4.82 to your weekly rate.

You say that you are now 67 and reached state pension age a couple of years ago – presumably during 2017/18. This means that there was only one full year – 2016/17 – where you could have worked post 6th April 2016 and built up more state pension rights.

By contrast, you say your friend has only just retired. On that basis, he could have worked in 16/17, 17/18 and 18/19. Compared with you that is two extra years or an extra £9.64 on his starting amount.

This is likely to be an important part of the reason why he is getting a larger state pension than you.

With every passing year since 6 April 2016, more and more people will have additions to their 2016 starting amount which will help them to get nearer and nearer the full flat rate.

When we are nine years into the new system (in April 2025), anyone with the full nine years of contributions will be able to add 9/35 of the full flat rate to their 2016 starting amount.

If their starting amount was simply the old ‘basic’ pension of £129.20, these extra nine years will take them right up to the full flat rate figure of £168.60.

For these people, all trace of past contracting out will have been wiped from their record because their years of work post 2016 will have ‘burned off’ the 2016 deduction.


Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.

He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.

Since leaving the Department of Work and Pensions after the May 2015 election, Steve has joined pension firm Royal London as director of policy.

If you would like to ask Steve a question about pensions, please email him at

Steve will do his best to reply to your message in a forthcoming column, but he won’t be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.

Please include a daytime contact number with your message – this will be kept confidential and not used for marketing purposes.

If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a Government-backed organisation which gives free help to the public. TPAS can be found here and its number is 0800 011 3797.

Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful. 

If you have a question about state pension top-ups, Steve has written a guide which you can find here. 


2nd T20 highlights: Simmons’ 67* helps WI beat IND, levels series 1-1




Virat Kohli

Virat Kohli. Photo: PTI

Windies cricket team beat by eight wickets in the second T20 International to level the three-match series 1-1 at Greenfield Stadium in Thiruvananthapuram on Sunday. Batting first, India scored 170 for 7 with Shivam Dube hitting 54 off 30 balls and Rishabh Pant contributing an unbeaten 33 off 22 as West Indies seamer Kesrick Williams and leg-spinner Hayden Walsh got two wickets apiece.In reply, Lendl Simmons scored an unbeaten 67 off 45 balls and scored 38 off 18 balls to finish the chase in 18.3 overs.

Despite Dube’s 54 off 30 balls, which had four huge sixes apart from three fours, India didn’t get the required momentum during the death overs on a track where Caribbean seamers used a lot of back of length slower deliveries along with well disguised short balls.

The last five overs in the Indian innings produced only 38 runs and West Indies were able to compensate for the 13 wides and two no-balls that they bowled during the evening. Kesrick Williams after being subjected to humiliation from Virat Kohli, came back well with figures of 2 for 30 in four overs including the prized scalp of the Indian captain (19 of 17 balls). There was no ‘Notebook Celebrations’ but just a quiet ‘finger on lips’ this time around.


2nd T20 full scorecard

The other bowler, who impressed was leg-spinner Hayden Walsh (2/28 in 4 overs), who pitched the ball good areas and was also able to get some sharp turn on his leg breaks.

Left-arm spinner Khary Pierry who gave away only 11 runs from his 2 overs in the Powerplay, was surprisingly not called on to bowl again.

The highlight of the Indian innings was giant Mumbai all-rounder Dube’s big-hitting prowess which he finally displayed at the international level.

The southpaw took a liking to the bowling of West Indies captain Kieron Pollard, smashing three huge sixes in the ninth over. He reached his maiden international fifty in 27 balls (4 sixes, two fours).

Skipper Kohli, who decimated the Windies attack in the game on Friday, saw Dube go big, but couldn’t get going, falling to Williams as he mistimed a cut.

KL Rahul who hit a classy half-century in the first match in Hyderabad, cracked a superb boundary, before he skied one from Pierre to Shimron Hetmyer to be dismissed for 11.

(15) who did not have a great outing in the series opener fell going for a lap shot off Jason Holder’s bowling and had his leg stump pegged back.

West Indies’ ploy of bowling back of the length did work as the deliveries were not easily coming onto the bat making it difficult for hitting through the line. Only briefly, it was Dube, who got a hang of Pollard’s slower ones and picked them up over deep mid-wicket region.

 Here are the playing 11 of both the teams:

India playing 11: Rohit Sharma, K L Rahul, Virat Kohli(c), Shreyas Iyer, Rishabh Pant(w), Shivam Dube, Washington Sundar, Ravindra Jadeja, Bhuvneshwar Kumar, Deepak Chahar, Yuzvendra Chahal

West Indies playing 11: Lendl Simmons, Evin Lewis, Brandon King, Nicholas Pooran(w), Shimron Hetmyer, Kieron Pollard(c), Jason Holder, Khary Pierre, Hayden Walsh, Sheldon Cottrell, Kesrick Williams

Source: Business Standard

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Anaj Mandi fire tragedy: Delhi police arrests building owner, his manager




At least 43 people were killed when a massive fire ripped through a four-storey building housing illegal manufacturing units in north Delhi’s congested Anaj Mandi area on Sunday morning, in the second deadliest fire incident in the capital.

Almost all the deceased were migrant labourers hailing from Bihar and Uttar Pradesh. Police and fire department officials said many of the fatalities occurred due to suffocation as the people were sleeping when the fire started at around 5 am on the second floor of the building that did not have fire safety clearance and was packed with combustible material like card boards.

It took over 150 firefighters nearly five hours to douse the blaze. As many as 63 people from pulled out from building. While 43, including one minor, died, 16 were injured. Two fire department personnel were hurt while carrying out rescue work, officials said.

Those awakened by the fire, suspected by officials to have been triggered by a short-circuit, had to struggle to escape as the exit routes were partially blocked and several windows were found sealed.

Police have arrested the property owner Rehan and his manager Furkan and a case has been registered under sections 304 (culpable homicide not amounting to murder) and 285 (negligent conduct with respect to fire) of the IPC. The case has been transferred to the Crime Branch.

The Delhi government ordered a magisterial probe into the tragedy, the worst fire accident in the capital since the 1997 Uphaar Cinema blaze that claimed 59 lives. It has sought a report within seven days.

More recently, a fire at hotel Arpit Palace on Karol Bagh left 17 dead in February this year.

Officials said 30 fire tenders were rushed after the blaze was first reported at 5.22 am in the Anaj Mandi building which housed manufacturing units for glass items, card boards, handbags and other goods.

The building was packed with combustible material like card boards, plastic wrappings, garments, rexine, plastic toys, packaging materials, aggravating the fire and resulting in dense smoke which suffocated the people trapped inside.

The injured included two minors. However, it was not confirmed whether the injured worked in the units.

Anaj Mandi fire tragedy: Delhi police arrests building owner, his manager

The narrow lanes of Anaj Mandi area made rescue operations difficult for firefighters, who had to cut window-grills to get access to the building. Some injured were carried to the hospital in auto rickshaws.

A preliminary probe suggested that a short-circuit triggered the blaze. Power discom BYPL said the fire began due to “internal system” trouble.

Prime Minister expressed grief over the loss of lives in the “extremely horrific” incident and Delhi Chief Minister said it was “very, very tragic”.

Modi and Kejriwal also announced an ex-gratia of ~2 lakh and ~10 lakh respectively for the next of kin of each of those killed.

Bihar Chief Minister Nitish Kumar said an ex-gratia of ~2 lakh each will be given to the families of the deceased.

Kejriwal also announced Rs 1 lakh for the injured and said his government will bear the cost of their treatment.

The Prime Minister approved Rs 50,000 each for those seriously injured. The amount will be paid from the Prime Minister Relief Fund, the PMO said in a tweet.

North Delhi Mayor Avtar Singh said he has asked the municipal commissioner to form a team which will visit the site and probe the exact cause of the fire.

Chaotic scenes were witnessed at the site, clogged with bystanders and politicians arriving in convoys. Firemen made their way through narrow lanes to rescue those trapped inside the blackened building and carried many unconscious labourers on their backs.

As the building lacked proper ventilation, most of the people died due to asphyxia.

Aditya Pratap Singh, deputy commander, NDRF said they detected carbon monoxide (CO) in the building. “The entire third and fourth floor was engulfed with smoke. The content of CO was more,” he said.

He said when the team started the operation, it found some windows sealed.

The dead and injured were taken to LNJP, Lady Hardinge and RML hospitals, where distraught relatives had a hard time finding their family members.

An elderly man whose three nephews worked at the building said, “At least 12-15 machines were installed in the unit. I have no idea about the factory owner. My nephews Mohammed Imran and Ikramuddin were inside the factory. I don’t know their whereabouts.” Imran and Ikramuddin were later found to be among the 43 dead.

Firoz Khan, 32, who worked in a cap-manufacturing unit on the third floor, escaped unhurt. He said the fire started on the second floor.

“When I got up, I saw flames engulfing the room we were sleeping in. The door was around 6 metres from me and I alerted other workers sleeping near me,” he said.

“Four-five of us rushed out through the door. Many sleeping away from the door were trapped. I don’t know if they are alive,” he said.

Thirty-four people were brought dead to LNJP hospital and smoke inhalation was the primary cause of death. Some of the bodies were charred, Dr Kishore Singh, Medical Superintendent, LNJP, said. Nine people were brought dead to Lady Hardinge hospital.

Several leaders including Congress leaders Sonia Gandhi and Rahul Gandhi condoled the loss of lives.

Kejriwal and his cabinet colleagues Imran Hussain and Satyendra Jain visited the site besides Union ministers Hardeep Singh Puri, Anurag Thakur, Harsh Vardhan, BJP MPs Manoj Tiwari and Vijay Goel.

An intense political blame game erupted over the incident, with the BJP holding the Kejriwal government responsible for the incident and the AAP alleging that the saffron party was doing politics over dead bodies.

The Congress has accused both the BJP, which is power in all three municipal corporations here, and the Aam Aadmi Party (AAP) for the incident.

Overhead wires were dangling in the area and despite repeated complaints in this regard, government agencies did not take any action, claimed Delhi BJP president Manoj Tiwari.

“The (Arvind) Kejriwal government is responsible for this. The MCDs come under the BJP. They are also equally responsible for it,” Delhi Congress Committee president Shubhash Chopra said.

Tiwari, on behalf of the BJP, announced Rs 5 lakh to the families of each of the deceased and Rs 25,000 for treatment of the injured. The BJP has also cancelled its programmes for the day in view of the tragedy.

“This settlement should not be here, they have been given alternative places but the Delhi government has not shifted them,” Union Minister Puri alleged.

Senior AAP leader and Rajya Sabha member Sanjay Singh said it was “shameful” that BJP was indulging in politics over dead bodies.

“It is the BJP which is responsible for issuing licences for running manufacturing units in residential areas. Instead of accepting its responsibility, the BJP has started doing politics over the dead bodies of the victims,” Singh charged.

Senior BJP functionary and Leader of Opposition in the Delhi assembly Vijender Gupta demanded that the Kejriwal government call an emergency session of the House to discuss ways to prevent such incidents.

Senior BJP leader and former Union minister Vijay Goel said it was the Delhi government’s responsibility to take action against illegal factories running in residential areas and prevent incidents of fire .

“It has become a common thing now. Such incidents happen, inquiry is conducted but the government does not do anything. Factories running in residential areas are to be provided plots at alternative places but the government did not do it,” he said.

Bihar’s Water Resources Minister Sanjay Jha blamed Delhi’s power department for the tragedy.

“I went to the spot, saw a mesh of overhanging wires. It was bound to happen. The power department is responsible for it. The Bihar CM is monitoring the situation and I believe the death toll will cross 43,” he said.

First Published: Sun, December 08 2019. 19:35 IST

Source: Business Standard

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Delhi fire: CM Kejriwal announces Rs 10 lakh for kin of deceased




The Delhi government has ordered a magisterial inquiry into the incident

Delhi Chief Minister announced an ex gratia of Rs 10 lakh for the families of those dead in the Anaj Mandi fire tragedy on Sunday, promising “strictest” punishment for those responsible for the incident.

The Delhi government has ordered a magisterial inquiry into the incident.

Kejriwal visited Anaj Mandi, where an early-morning fire at a four-storey building housing illegal manufacturing units claimed 43 lives, and also met the injured admitted to LNJP hospital.

He announced a compensation of Rs 1 lakh for those injured in the blaze and said the government will ensure proper treatment for the injured.

“It’s a very tragic incident. The exact numbers of casualties are being ascertained although over 40 have died. Magisterial inquiry has been ordered. The exact cause of fire will be found after the probe. We will ensure strictest punishment for the guilty,” he told reporters.

First Published: Sun, December 08 2019. 17:35 IST

Source: Business Standard

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