How do I work out my 'alternative yearly average'?


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To calculate your 'alternative yearly average':

  1. count the number of tax years starting from the 1979/'80 tax year up to and including the tax year before you reach age 66,
  2. count up all the reckonable contributions paid or credited over these years,
    and
  3. divide the number of contributions (2) by the number of tax years (1).

To qualify for the maximum rate of standard State Pension (Contributory), based on the 'alternative yearly average' you must have an average of at least 48 paid or credited contributions. You may round up 47.5 or more to 48 to qualify for the maximum standard rate State Pension (Contributory).

Example 3

A person reached age 66 on 1 September 2007. The last tax year before they reached age 66 was 2006.

  1. Counting from the 1979/80 tax year up to and including the 2006 tax year gives a total of 28 years.
  2. They have a total of 1,456 reckonable contributions.
  3. Dividing 1,456 contributions by 28 years gives an average of 52.

Based on this record they qualify for State Pension (Contributory) at the maximum rate.

Note
If you do not qualify for a pension using the 'alternative yearly average' we will consider you for a pension using the 'yearly average'.

Last modified:18/01/2010
 

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