State pension forecast

ossie48 · 18 October 2017 at 11:28AM

Forecast £159.55 a week 32 years of full contributions, 16 years to contribute, 3 years when you did not contribute enough.

Estimate based on NI record up to April 2016 £145.88 a week

You can make up the shortfall
Pay a voluntary contribution of £733.20 by 5 April 2023. This shortfall may increase after 5 April 2019.

As I'm early retired and made no contributions for the last few years is the 'voluntary contribution' above an accrual or would I have to pay all the voluntary contributions that are listed year by year. In other words 2014/15 was £722, previous year £54. Tried ringing the help line but cant get a reply.

Cheers

Francesca99 · 18 October 2017 at 11:36AM

BE VERY CAREFUL about paying voluntary contributions for years prior to 2016. I am currently in dispute with HMRC about this very thing. I retired early and had a forecast done which showed 32 qualifying years. I rang and asked how to top up to 35 and was given the necessary process. I paid over £2000 to top myself up to 35 years but payments were for years before 2016. After I made the payment I got another forecast and it showed my pension hadn't changed since the previous forecast. Rang DWP who said that because of changes in legislation in 2016 any additional payments made would NOT increase my pension so I should reclaim the money from HMRC. I am trying but HMRC are telling me that because of changes in their legislation voluntary NI contribution payments ARE NOT REFUNDABLE. I am now down £2000+ and fighting HMRC every step of the way to get my money back. HMRC and DWP are NOT giving people the right information when dealing with additional contributions so again, BE CAREFUL

ossie48 · 18 October 2017 at 11:45AM

That sounds horrendous and doesn't give me any confidence in the system. I'm really not sure what to do next or just leave it for a while. I hope you get things sorted.

Francesca99 · 18 October 2017 at 11:55AM

Thanks, I hope so too. Your only hope would be to get DWP to put in writing what your pension would be if you paid the additional contributions before you pay any money to HMRC. Just shows how much trouble you can get yourself into by trying to do the right thing and taking the information you are given over the phone at face value.

xylophone · 18 October 2017 at 12:06PM

You already had thirty years of contributions by 6/4/2016 so there is no point in paying for pre 2016 years.

You can make a voluntary contribution for post 2016 years.

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

Francesca99 · 18 October 2017 at 12:12PM

Seems that Royal London have better info than DWP and HMRC. Wish I has seen this before I asked their advice!!! Really useful document. Thank you.
Maybe if they wont give me my money back they will reallocate it to future years so I might get some benefit.

molerat · 18 October 2017 at 12:14PM

OP's current amount is 32/35ths of the new pension so the starting amount should be based on the "new" system. Providing no COPE amount is mentioned pre 2016 contributions should therefore add to that pension. OP needs to contact FPC, as per the flowchart, to confirm which scheme the starting amount is based on. The 2013/14 year would then be a bargain buy !

xylophone · 18 October 2017 at 12:54PM

The OP (ossie) has a deferred DB pension from the 80's. This was almost certainly "contracted out".

http://forums.moneysavingexpert.com/showthread.php?p=73276558#post73276558

The calculations at 6/4/16 would have been

Full BSP (because he had over 30 qualifying years) + (SERPS/S2P - COD)

or 32/35 NSP - COPE (rebate derived amount).

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

It seems virtually certain therefore that his foundation amount was based on the old system so he only benefits from buying post 2016 years?

molerat · 18 October 2017 at 1:26PM

OK, but strange the forecast is exactly 32/35ths of the new pension. My post had a few caveats as all necessary information was not provided in the op such as any COPE amount.

dog_nanny · 18 October 2017 at 1:53PM

Thanks xylophone for the very useful Royal London guide. I picked up something interesting from it. There is a voluntary class 2 contribution which self-employed people with low profits can pay. It's £2.85 a week, compared to £14.25 for class 3. Since every extra year you make up gives an extra £4.56 pension per week, this looks like a no-brainer....... unless I'm missing, or misunderstanding something?

molerat · 18 October 2017 at 2:03PM

erbriggs wrote: »

Thanks xylophone for the very useful Royal London guide. I picked up something interesting from it. There is a voluntary class 2 contribution which self-employed people with low profits can pay. It's £2.85 a week, compared to £14.25 for class 3. Since every extra year you make up gives an extra £4.56 pension per week, this looks like a no-brainer....... unless I'm missing, or misunderstanding something?

Correct ....... but ......that cheap option is ending wef April 2018

State pension forecast

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