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  • FIRST POST
    • Annie1960
    • By Annie1960 18th Mar 17, 10:03 PM
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    Annie1960
    State pension forecast
    • #1
    • 18th Mar 17, 10:03 PM
    State pension forecast 18th Mar 17 at 10:03 PM
    After reading some threads on this forum, I logged on to the gov website and looked at my most recent state pension forecast.

    I have had forecasts in the past which arrived through the post showing the number of years I paid full NICs. However, the computer showed this information broken down, and I think one of the years may be wrong as I was in full-time education aged under 19 (I turned 19 in March, so was only 19 for one month).

    Do I literally have to be under 19 for the complete year, or will being 19 for one month be enough to make the whole year incomplete?

    Also, it says on the website that if you want to correct your NI record you have to send evidence - it was so long ago (1978 to 79) that I don't think I have any evidence.

    Does anyone have this level of detailed knowledge of NI contributions?
Page 1
    • Triumph13
    • By Triumph13 18th Mar 17, 10:13 PM
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    Triumph13
    • #2
    • 18th Mar 17, 10:13 PM
    • #2
    • 18th Mar 17, 10:13 PM
    When your birthday fell would make no difference. The old rule that you should fall under gave 3 years of 'free' NI credit for the tax years in which you turned 16, 17 and 18.
    • BOBS
    • By BOBS 18th Mar 17, 10:15 PM
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    BOBS
    • #3
    • 18th Mar 17, 10:15 PM
    • #3
    • 18th Mar 17, 10:15 PM
    do you not have enough years without worrying about this particular year when you were 19 ?
    • Annie1960
    • By Annie1960 19th Mar 17, 12:25 AM
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    Annie1960
    • #4
    • 19th Mar 17, 12:25 AM
    • #4
    • 19th Mar 17, 12:25 AM
    I have 31 years. I took early retirement before it increased to 35 years.
    • Annie1960
    • By Annie1960 19th Mar 17, 12:27 AM
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    Annie1960
    • #5
    • 19th Mar 17, 12:27 AM
    • #5
    • 19th Mar 17, 12:27 AM
    When your birthday fell would make no difference. The old rule that you should fall under gave 3 years of 'free' NI credit for the tax years in which you turned 16, 17 and 18.
    Originally posted by Triumph13
    Thanks for the clarification, I thought it went up to 19 as long as you were in education.
    • Annie1960
    • By Annie1960 19th Mar 17, 12:51 AM
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    Annie1960
    • #6
    • 19th Mar 17, 12:51 AM
    • #6
    • 19th Mar 17, 12:51 AM
    I've just checked my record again and I have 2 years credited to me, the year I turned 17 and the year I turned 18. I was still at school then, but continued in education the following year with no credit.
    • p00hsticks
    • By p00hsticks 19th Mar 17, 9:20 AM
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    p00hsticks
    • #7
    • 19th Mar 17, 9:20 AM
    • #7
    • 19th Mar 17, 9:20 AM
    I've just checked my record again and I have 2 years credited to me, the year I turned 17 and the year I turned 18. I was still at school then, but continued in education the following year with no credit.
    Originally posted by Annie1960
    I'm the same age as you - I'm not an expert but I think you should have got a credit for the year you turned 16 as well. You didn't get credits for being in full time education beyond the age of 18. (there is now a credit for being on certain governement approved training courses that don't last more than a year).

    However, it may be immaterial anyhow - what does your pension forecast predict you'll get ? and does it give a COPE amount ?
    • Annie1960
    • By Annie1960 19th Mar 17, 9:35 AM
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    Annie1960
    • #8
    • 19th Mar 17, 9:35 AM
    • #8
    • 19th Mar 17, 9:35 AM
    I'm the same age as you - I'm not an expert but I think you should have got a credit for the year you turned 16 as well. You didn't get credits for being in full time education beyond the age of 18. (there is now a credit for being on certain governement approved training courses that don't last more than a year).

    However, it may be immaterial anyhow - what does your pension forecast predict you'll get ? and does it give a COPE amount ?
    Originally posted by p00hsticks
    It gives a COPE amount that is well below the amount I currently get from my Civil Service pension. Pension is 121.38.

    EDIT: I have just gone back and clicked on the 'view details' link for the year I turned 16, and they have credited me with 102 weeks of NI. Must have been a long year! When I count up all the years manually, counting this year as 2 years, it all adds up, so mystery solved.
    Last edited by Annie1960; 19-03-2017 at 9:57 AM.
    • xylophone
    • By xylophone 19th Mar 17, 10:51 AM
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    xylophone
    • #9
    • 19th Mar 17, 10:51 AM
    • #9
    • 19th Mar 17, 10:51 AM
    Pension is £121.38.
    Your State Pension Forecast is £121.38?

    Had you thought of voluntary contributions to increase your state pension?

    https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
    • p00hsticks
    • By p00hsticks 21st Mar 17, 11:03 AM
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    p00hsticks
    It gives a COPE amount that is well below the amount I currently get from my Civil Service pension. Pension is 121.38.
    Originally posted by Annie1960
    In that case, your 'starting amount' as calculated by the Pension Service as at 6/4/16 (being the higher of the amounts as calcuated under the 'old rules' and 'new rules') will have been based on the old rules. As only 30 years was needed for a full basic pension under the old rules, and you say you definitely have 31, whether they have included the year you turned 16 or not is immaterial.

    However, as xylophone says above , you can potentially increase that £121.38 by around £4.45 a week for each additional post April 2016 year you get prior to your state pensione date (check out his link for more details)
    • Annie1960
    • By Annie1960 22nd Mar 17, 4:21 PM
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    Annie1960
    In that case, your 'starting amount' as calculated by the Pension Service as at 6/4/16 (being the higher of the amounts as calcuated under the 'old rules' and 'new rules') will have been based on the old rules. As only 30 years was needed for a full basic pension under the old rules, and you say you definitely have 31, whether they have included the year you turned 16 or not is immaterial.

    However, as xylophone says above , you can potentially increase that £121.38 by around £4.45 a week for each additional post April 2016 year you get prior to your state pensione date (check out his link for more details)
    Originally posted by p00hsticks
    So even if they have used the 'old' rules to calculate my amount, I can still increase my amount by making extra payments under the 'new' rules?
    • molerat
    • By molerat 22nd Mar 17, 4:26 PM
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    molerat
    So even if they have used the 'old' rules to calculate my amount, I can still increase my amount by making extra payments under the 'new' rules?
    Originally posted by Annie1960
    Yes, a win win situation.
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    • Suffolk lass
    • By Suffolk lass 22nd Mar 17, 4:44 PM
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    Suffolk lass
    Annie, in your earlier post (no 4) you say you are receiving a civil service pension having retired early. If you have not yet reached state pension age (SPA), you could consider paying for the intervening years between when you stopped work and when you reach SPA. Each year you pay for (going back up to 6) would add £4.45 a week to your state pension. The rule change in 2016 is irrelevant to whether you were opted out of serps or opted in (you were out while a civil servant) if you had already stopped work in April 2016.

    In this way you could enhance the number of years and the amount per week. The guidance is all on Gov.uk, as xylophone indicates and the cheapest way is class 2 contributions (voluntary fixed cost) until they are withdrawn (imminently).

    Regarding the first three years, I recommend secure messaging DWP to ask about the discrepancy. You should have a credit for the tax year in which you reach 16 and each of the next two if you were in full time education.

    If you have ever had periods of unemployment, maternity leave, or years you took out to care for children - these should all have been credited assuming you signed on, received maternity pay and/or claimed child benefit. There are also more generous rules relating to disability or incapacity credits.

    It is one of those things where the rules have repeatedly changed so well worth querying with DWP
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    • p00hsticks
    • By p00hsticks 22nd Mar 17, 5:15 PM
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    p00hsticks
    Each year you pay for (going back up to 6) would add £4.45 a week to your state pension.
    Originally posted by Suffolk lass
    Just to clarify this - in the OPs case only years after April 2016 until the year before you reach State Pension Age will add £4.45. Years prior to April 2016 can increase a persons 'starting amount' in some cases, but only if they have less than 30 years as at 6/4/16.
    • Annie1960
    • By Annie1960 22nd Mar 17, 5:29 PM
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    Annie1960
    I rang the number on the website, and they will send me an up-to-date statement. Once I have this, they advised me to ring back and ask to speak to 'Voluntary Contributions Expert' who will advise me on what vol. contributions I can make.

    I also noticed something extra. I have 31 full years confirmed by the website, but it is telling me I need to make up 8 years more contributions to get the full £155 pw. The person on the phone said this was due to the fact I was contracted out while a Civil Servant.

    So it may not be worthwhile making up the shortfall, as I would pay 8 years to get another £34.27 pw.
    • Annie1960
    • By Annie1960 22nd Mar 17, 5:35 PM
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    Annie1960

    However, as xylophone says above , you can potentially increase that £121.38 by around £4.45 a week for each additional post April 2016 year you get prior to your state pensione date (check out his link for more details)
    Originally posted by p00hsticks
    It seems this may not be the case for me. Instead of the 4 extra years I need to bring my 31 years u to 35 years, I will need to contribute for 8 extra years because I was contracted out.
    Last edited by Annie1960; 22-03-2017 at 5:39 PM.
    • greenglide
    • By greenglide 22nd Mar 17, 5:41 PM
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    greenglide
    No.

    Every year of post 05/04/2016 contributions is worth an extra £4.45 irrespective of whether you have been contracted out or not.

    The contracted out deduction has been used in the calculation of the Starting Amount, it is not used again.
    • p00hsticks
    • By p00hsticks 22nd Mar 17, 6:13 PM
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    p00hsticks
    So it may not be worthwhile making up the shortfall, as I would pay 8 years to get another £34.27 pw.
    Originally posted by Annie1960
    A years Class 3 NI voluntary contributions currently costs around £733 and this will buy you an additional £4.45 a week on your state pension for life. You only need to be claiming your pension for just over three years to be 'in profit', so it's an incredibly good return for a small investment.
    • Annie1960
    • By Annie1960 22nd Mar 17, 6:27 PM
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    Annie1960
    No.

    Every year of post 05/04/2016 contributions is worth an extra £4.45 irrespective of whether you have been contracted out or not.

    The contracted out deduction has been used in the calculation of the Starting Amount, it is not used again.
    Originally posted by greenglide

    OK, then let me put it another way. I was contracted out. There was a good reason for this at the time as I paid only 10.6% NI instead of 12%, and in addition I got a Civil Service pension. This was equivalent to between 16 - 20% of my salary contributions by my employer into my pension fund (as it stated this on my monthly pay slips at the time). I know the PCSPS is 'unfunded' hence these percentages are notional, but this is what I would have had to have paid into a pension to get similar benefits. I could have opted out of this if I had wanted, but it would not have been in my interests to do so.

    Somehow (and I don't understand the actual calculation), this means that instead of needing to pay a further 4 years' NI to reach 35 years, I would need to pay 8 years'. This is something to do with the COPE issue, but I can't find a fornula for this.

    However, taking all this into account, I'm still better off than if I did not have a Civil Service pension and did not have a COPE deduction to my 2016 starting amount. I just wish I knew what the calculation for this was as I like transparency, but I can see it was still a good deal.

    So, I will need to pay voluntary contributions for 8 years to get the extra £34.27 pw to make up my state pension to the maximum. This is the calculation I need to do to work out whether it's worthwhile, and I can apparently get the figures for this by phoning back the gov number I rang earlier today (once I have received my full statement details).

    I hope this makes sense.
    • Annie1960
    • By Annie1960 22nd Mar 17, 6:35 PM
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    Annie1960


    Regarding the first three years, I recommend secure messaging DWP to ask about the discrepancy. You should have a credit for the tax year in which you reach 16 and each of the next two if you were in full time education.

    It is one of those things where the rules have repeatedly changed so well worth querying with DWP
    Originally posted by Suffolk lass
    I did mention the age 16 issue when I spoke to the person on the phone today. She said she will send me a full statement of my details (I think it is more detailed than the information on the website), and I can query it when I call back. They can fix it if it turns out to be wrong.

    However, as the website says I have 102 weeks' contributions for the year I turned 17, I think they are just showing it in a different way, so the total of 31 years may be accurate.

    Thanks to everyone for all the points you made.
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