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 last tax year before you reach age 65,
  2. count up all the reckonable contributions paid and credited over these years,
  3. divide the number of contributions and credits (2) by the number of tax years (1).

Example:
A person reached age 65 on 28 November 2009. The last tax year before they reached age 65 was the 2008 tax year.

  1. Counting from the 1979/80 tax year up to and including the 2008 tax year gives a total of 30 tax years.
  2. They have a total of 1,434 reckonable contributions.
  3. Dividing 1,434 contributions by 30 years gives a yearly average of 48 contributions (47.8 rounded up).

Based on this record they will qualify for the maximum standard rate of State Pension (Transition).

You may round up 47.5 or more to 48 to qualify for the maximum standard rate State Pension (Transition).

To qualify for the maximum standard rate State Pension (Transition) based on the 'alternative yearly average' you must have an average of at least 48 contributions.

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

Last modified:15/01/2010
 

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