NI Credits / Voluntary Contributions?

cw18

Sorry if this is the wrong board, but having checked out various forums I wasn't sure where it should go -- and worrying about a State Pension due in 23 years (if such a thing still exists then and/or they don't move the goalpost again in the meantime) seems a minor concern with so many members struggling to make ends meet right now -- but it's been niggling me since I was asked by the "kids" (17, 19 and 24) a couple of nights ago if I'm going to be OK financially and I assured them I was !!

I know CB gives HRP, but does this give credits towards State Pension?
I know some benefits give some NI credits though I'm not sure which they are -- I'm especially interested in Maternity Allowance (paid in 1991), IB (in the last 12 months), and Widowed Parents Allowance (as of now) -- but again are they the right sort for State Pension?

My "history" as it stands is.....

From Dec '03 - Oct '04 I have HRP from CB, and within that time I was on Income Support (or whatever it was then) from April '04-Oct '04 (from Sept '03-April '04 I was on my partners IS claim)

I started a full-time job in October '04, and paid NI contributions from this date.

I had 13 weeks Maternity Leave in 1989 - but was on full salary (good employer) for all of this, so still paid NI

I had 15 weeks Maternity Leave in 1991 -- 13 weeks on full pay (paying NI) and 2 weeks on about £50/week (but I think I'd still have paid NI as the other weeks in that monthly pay slip were at full rate)

I had a weekend between jobs in September '98

In my 'current' job I've paid NI right through, with the exception of 4 months I was on IB (Oct '07-Feb '08) -- though I've not worked for the same company right through as we were TUPE'd in May 2007.

I surrendered the CB to my DH in 2000 when he took voluntary redundancy -- made more sense for him to have the HRP as I was working -- but have been in the process of putting it back into my name since September.



I'm now in the position where I lost my DH last week (expected, but not so soon), and lose my job this Wednesday (great timing!). As our 17 year-old son is at college I'm putting in a claim for Widowed Parents Allowance (though I'm struggling to figure out whether that's paid for 52 weeks or until the end of his course which is Summer 2010). I will also be getting a Widows pension from the company DH left in 2000 (plus an equal amount for having a dependant child until DS's course finishes). I'm in no hurry to find another job as I want to reavaluate my life, and feel really lucky that I can afford to do this.

In fact, doing some quick calculations I don't think I'll ever be entitled to anything that's means tested (too many bits of capital adding up to a healthy -- but not necessarily "support you for life" -- level) which means I don't "have" to work again........ though I can't imagine coping mentally if I never do so

But my one concern is what this will do to my State Pension

I currently have 4 company pensions with 3 companies, 3 of which are currently 'preserved' (one final salary with 13 years employment, one final salary with 7 years employment, one money purchase with 2 years after the company changed the scheme) and one money purchase with 16 months that will be preserved from this week -- so at least I won't be penniless, especially as most of it is in an index linked final salary scheme......

But if I never work again then I can only assume my State Pension is going to be pretty meagre? If I'm not on any benefits that give the "correct" NI credits and don't find a job where I pay NI (or get credited due to the LEL rules) can I pay something voluntarily? If I can, then who do I speak to and how do I find out what it would cost? Would this also potentially open the door to other things in the future that are 'NI contribution' dependant (such as JSA(C))?


I know I can apply for a statement of where I stand as of now, but am more worried about where I'll be in if I have no contribitions for the next 5 years or more

healy

HRP does not give credits towards the state retirement pension but reduces the number of years that you need to qualify for a pension.

You can pay voluntary class 3 National Insurance contributions to keep your contributions up to date. If want to do this you need to contact the National Insurance Office, the head office is in Newcastle. The class 3 contributions do not help towards benefits like JSA contribtion based.

From April 2010 evereyone who retires after this date only needs 30 years complete years for a state retirement pension so you have quite alot of leeway compared to before.

cw18

So I currently have an NI history of Oct '84-Nov '08, less 4 months IB and possibly 2 months on Maternity...... so almost 24 years.

From what you say, with a State Pension date of January 2032, I only need to make up just over another 6 years in the next 23 and a bit years to get a full State Pension? (just checked on a pension calculator, and I won't get until 66!)

Would paying some sort of self-employed NI cover this? (One option I'm considering is becoming a registered child-minder -- was already considering it before this latest turn of events).

What other benefits are there to voluntarily paying Class 3 contributions? Or is just to cover State Pension?

stazi

Class 3 Voluntary NIC only go towards State Pension (SP) at £7+pw.
Self employed Class 2 NIC at £2+pw, in addition to SP, covers the new ESA.

cw18

So I'm better off self-employed, as it's cheaper and gives me more !!!!

Thanks for that info
Will certainly bear it in mind, but at least it sounds like I have a good couple of years before I need to worry

healy

cw18 wrote: »

So I currently have an NI history of Oct '84-Nov '08, less 4 months IB and possibly 2 months on Maternity...... so almost 24 years.

From what you say, with a State Pension date of January 2032, I only need to make up just over another 6 years in the next 23 and a bit years to get a full State Pension? (just checked on a pension calculator, and I won't get until 66!)

Would paying some sort of self-employed NI cover this? (One option I'm considering is becoming a registered child-minder -- was already considering it before this latest turn of events).

What other benefits are there to voluntarily paying Class 3 contributions? Or is just to cover State Pension?

Stazi has covered most of your questions but yes that is all you will need to get a full pension, but it is probably worth getting a pension forecast at some point to see how many qualifying years you have.

cw18

Thanks Will ask for a forecast early next year when I've finished with all the paperwork I'm dealing with at the moment !!