qualifying years for state pension.

spot1034 · 21 January 2013 at 1:38PM

Interesting reading through this thread. Having looked at everything I can find I think there might not be an answer to this yet, but do we know how the entitlement to an extra amount of second state pension will be dealt with if you have less than 35 qualifying years? To take my own situation, I am 55, now economically inactive - not claiming any benefits - and have exactly 30 years in contributions and was not expecting to make any more. I also have an additional entitlement of about £7.50 in second state pension. If I make no further contributions, is my entitlement going to be 30/35ths of £144 plus an additional £7.50, with this £7.50 being an add-on which will not be uprated for inflation in the same way as the main bit of the pension, or will the additional entitlement be converted into an enhanced record, so that in the example given the foundation amount might be upped to say 31 or 32 qualifying years and any pension paid will therefore all be subject to the triple lock protection against inflation?

Mojisola · 21 January 2013 at 1:44PM

lobbyludd wrote: »

HI - this is probably a really dumb question, but I cannot find out having googled....

do you have to have paid NI for the whole of a tax year for it to be a qualifying year?

I don't think it counts unless you've got the full tax year paid up.

Edited - see SnowMan's explanation further down.

Linton · 21 January 2013 at 1:51PM

spot1034 wrote: »

Interesting reading through this thread. Having looked at everything I can find I think there might not be an answer to this yet, but do we know how the entitlement to an extra amount of second state pension will be dealt with if you have less than 35 qualifying years? To take my own situation, I am 55, now economically inactive - not claiming any benefits - and have exactly 30 years in contributions and was not expecting to make any more. I also have an additional entitlement of about £7.50 in second state pension. If I make no further contributions, is my entitlement going to be 30/35ths of £144 plus an additional £7.50, with this £7.50 being an add-on which will not be uprated for inflation in the same way as the main bit of the pension, or will the additional entitlement be converted into an enhanced record, so that in the example given the foundation amount might be upped to say 31 or 32 qualifying years and any pension paid will therefore all be subject to the triple lock protection against inflation?

From my understanding, assuming you have no contracted-out S2P, in 2017 they will calculate a foundation value for your total pension entitlement being the higher of:

1) Your entitlement under the old rules including your S2P
2) 30/35 * £144

This foundation value will increase with inflation and also could increase should you work or buy further NI years.

SnowMan · 21 January 2013 at 2:18PM

lobbyludd wrote: »

HI - this is probably a really dumb question, but I cannot find out having googled....

do you have to have paid NI for the whole of a tax year for it to be a qualifying year?

I have a number of 1/2 or 3/4 years either side of going to university and doing my PhD, and whether or not these count impacts on whether I can get a full flat rate pension under the new scheme.

I've registered with the government gateway to get a forecast but will have to wait for the registration details to get through the post.

also do your "starter years for ages 16 to 19 count as years contributing serps/s2p or contracted out? - i'm trying to work out how many years I haven't been contracted out, to see if I can get to 35 of those before retirement.

apols if irrelevant .

If employed I think you have to have paid national insurance contributions on earnings that at least equal the national insurance lower contribution limit to get a full qualifying year.

So let's say you earned £5,500 over say the first 4 months of say 2011/2012 and nothing subsequently in that tax year.

Firstly for income to count towards credits you would have to have been above the weekly national insurance lower threshold throughout that 4 month period of £102 pw which you would have been if you had earned the £5,500 evenly over that period. If there were any individual weeks where you earned less than £102pw I imagine the earnings from that week are excluded from the next bit of the calculation - although that bit is a complete guess.

And the lower threshold for 2011/2012 is £5,304 (52 x 102) so your £5,500 of earnings exceeds that.

So you would get a years credit as I understand it and so a qualifying year.

If you earned say £5,000 instead you would have got 49 weeks credit for the year (= 5000/5304 x 52 =49). HMRC would have then given you the opportunity to pay for those 3 weeks to make you up to a year. If you paid for those 3 weeks you would get a full year of credits and so a qualifying year, if you didn't you wouldn't have a qualifying year.

That's how I understand it although some of the detail may be wrong.

FLAPJACK · 21 January 2013 at 2:26PM

Having had a "snow bound confined to barracks weekend" I went on line to get a "State Pension Statement" (formerly known as a pension forecast.

I had had one in 2009 so I thought I'd see if anything had changed.....it shouldn't have as I retired in 2006.
The 2009 forecast said that I had a total of 33 years in the bag i.e full SP.

The (2012) Pension Statement said that I have a total of 30 years, giving me a full pension if I were of SPA now.
I won't get my SP until 2023....i.e I am 5 years short of the full SP.

I worked from 16 to 49 ...33 years.

So what happened to the 3 years!!

After trawling the Government Gateway site I found a section explaining the "Auto Credits" of NI contributions.

You are creditted with these between the age of 16 and 18....so that made sense of me getting 33 years.

However the 3 years have been withdrawn, they are only creditted if your 16/17/18 birthdays fell AFTER 06/04/75....mine didn't.
I cannot find anything about when this was decided.

So it appears that I've "lost" 3 years and also "added" 1 year before I can get the SP at 66.

Not sure why the "Additional SP" forecast in 2008 was £8.45 pw, and now is £3.87.

Well it's all 10 years away....so I expect the way things are going the SP goalposts will be moved a few times more by then.

I cannot see either if you are in this situation, if you can buy extra years to make up the difference.....and if you could would it actually be financially worth it in the long run?
Does anyone know if you can buy years (for this particular situation) and would it be worth it?

Cheers

Linton · 21 January 2013 at 2:38PM

I think from what has been said elsewhere that the latest pension statements dont tell you if you have more than 30 years as 30 years is all you needed at the moment.

In my case my 16/17/18 birthdays were before 1975 and I have 39 years of NI although I only worked for 32 years. The rest seems to come from full time education from the age of 16.

SnowMan · 21 January 2013 at 2:41PM

FLAPJACK wrote: »

However the 3 years have been withdrawn, they are only creditted if your 16/17/18 birthdays fell AFTER 06/04/75....mine didn't.
I cannot find anything about when this was decided.

Mentioned here

Since April 1975, NI contributions have been credited to people for the tax year in which they reach age 16 and the following two tax years in order to protect their future basic State Pension entitlement and Bereavement Benefits for a spouse or civil partner (“Starting Credits”). The policy intention behind the credits was to ensure that young people staying on in education beyond the minimum school leaving age did not lose future benefit entitlement as a result. There is no requirement for the individual to be in the UK at the relevant age. This was primarily to ensure that young people being educated outside the UK were not penalised.

fannyadams · 21 January 2013 at 3:00PM

angry and sad to discover that EVERY time i think i'm getting near the number of years stamp i need for full pension they go and move the goal posts.
I've only been signing on (and not getting JSA) because in April I'll have 30 years paid up. NOW I'm going to have to find another 5 years...
although there was a 'loophole' i read about in Sunday Torygraph about decalring myself as self employed and paying up 5 years NI up front as this is a lower amount than full employment NI.

gadgetmind · 21 January 2013 at 3:09PM

fannyadams wrote: »

I've only been signing on (and not getting JSA) because in April I'll have 30 years paid up. NOW I'm going to have to find another 5 years...

Your 30 years under the old system were worth £107.50 whereas your 30 years under the new system are worth £123.42

Does this really make you angry?

And yes, you can pay self employed class 2 to make up the years, but I wish the media would shut up about it as my wife's being doing it for ages and I don't want them to mess with the rules!

spot1034 · 21 January 2013 at 8:37PM

If you have not made sufficient contributions in a particular financial year, what is the DWP's present policy as to sending out notifications? I ask because I have received no communication since I stopped working (and not getting any automatic credits) and I assume this is because I had reached 30 qualifying years, which until last week was thought by all concerned to be sufficient for a full pension.

I am now wondering whether, following the shifting of the goal posts, I might now expect to receive notification about the recent years when I have not paid any contributions.

qualifying years for state pension.

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free