Help with state pension decision.

Cacran

I wonder if anyone could give me their opinion about a pension problem that I have? I am 50 years of age. work so part time that I do not pay any National Insurance. Until July, I was covered for this as I was in receipt of Child Benefit. Prior to having the children I worked full time from 1970 to 1986. I paid full contributions. I recently obtained a pension forcast. I will not be eligible for State Pension until I am 65. It seems that I have a shortfall in years that I have contributed. To ensure that I am eligible for a full pension in my own right. I will need to pay in, a further 5 years voluntary contributions at £7.35 per week. If I do not pay these I will be entitled to 62 % of the full pension. If I pay I will obviously get the 100 %. My Husband should then get his own and I will get mine in my own right. I could chose not to draw my own pension and get a the married couples one, but I think that would only be about 60 %, therefore, either way, my own would be better. It may sound obvious what I should do, but not to me! We have savings and I am sure we will be taxed on them at the time, unless things change. The more I get, the more we would be taxed. any experts out there to advise me???? Help!!!!

CIS

You could have your pension increased against your husbands records if have less than 60% of his, but as you have 62%, you are right that you couldn't claim it.

From what I can tell, out of 44 yrs requisite, you have 16 qualifying yrs, this however has been reduced further by your 18yrs of HRP , to 26 requisite years.

So you currently have ((100/26)*16)= 62%.

As you require 26 yrs and you now have 16 yrs, you are 10 yrs away from a full state pension.

Between 6/4 prior to your 60th birthday and 5/4 prior to your 65th birthday you will receive 5 years of automatic credits.

So thats 5 less yrs of contributions you need to pay, leaving you with 10 years to make up.

These yr scan be made up anytime between now and pension age (providing your within the 6 yr limit to pay for the year). You can pay for the cheapest 5 yrs shown on your forecast or pay for 5 yrs in the future

(DONT pay for any yrs betwwen 60 and 65 as theese are covered by your auto credits,no point paying for something free)

Please correct me if anything appears wrong as Iam just calculating from the details you supplied so far.

I used to work for state pension forecasting so would be happy to provide any mor ehelp if you need it.

dunstonh

I will not be eligible for State Pension until I am 65.

The retirement age for women was increased some years back to 65. It was a progressive increase from 60 to 65, dependent on your date of birth. Your age does put you at 65.

I will need to pay in, a further 5 years voluntary contributions at £7.35 per week. If I do not pay these I will be entitled to 62 % of the full pension.

You will need to pay £441 in extra contributions to get £4266p.a (in todays terms). If you dont pay that £441 and using your 62% that you would get, it would mean you getting £2644 a year (in todays terms).

So, paying £441 gets you £1622 a year

We have savings and I am sure we will be taxed on them at the time, unless things change. The more I get, the more we would be taxed. any experts out there to advise me???? Help!!!!

Forget the tax. Is it better to earn £7000 a year each and pay no tax or earn £10000 a year after tax paid?

Based on the figures you have posted, paying it makes sense.

margaretclare

I would pay it - a lot of the problems of women retiring into poverty is that they chose not to pay in when they had the choice to. OK a lot of them are saying they couldn't afford the contributions, but when you look at the responses above, 'paying £441 gets you £1622 a year' - it's an obvious choice really, isn't it.

I think the sooner we all start taking responsibility for our own pension provision whether married or single and stop this idea of retiring on someone else's contributions, the sooner will a lot of these anomalies be ironed out.

Aunty Margaret

CIS

Someone 50 now would have been born between Nov 1954 and Nov 1955, depending on the month, it could put them to 65. Anyone born after april 1955 would retire at 65, those born between Nov 1954 and April 1955 would retire at no earlier than 64 1/2.