Pension Boosting article discussion

harryhound

Perhaps they did not understand the consequences when they got divorced?
[or do they now qualify for the "window of opportunity"]

SnowMan

If someone has been paying the married woman's stamp and get divorced they can then substitute their former husband's record (but only up to the date of the divorce) for theirs automatically, and with nothing to pay.

From the date of divorce the wife pays normal (e.g. schedule A not schedule E) national insurance and gets credited based on her own contributions. This assumes the wife doesn't remarry before SPA.

So divorcees can in many circumstances be real gainers having paid the lower stamp and often getting a full state pension. The "penalty" is for staying married :rotfl:

cepheus

Since the reduced £421 per National Insurance year price has been extended, would this still apply to last FY or this FY is paid now?

Unfortunately I have 29 years NI contributions and have been working over the last 23 (including 08/09)and just been made redundant.

SnowMan

Sorry to hear you have been made redundant.

Have you claimed contributions based JSA? This is paid for 6 months (and it doesn’t matter if you have capital although there are a few exceptions if you see the link above) and while you are receiving this you get national insurance credits towards your basic state pension. If you then go into paid work before this runs out you will then probably end up with a normal credit for the 2009/2010 year in any case.

I think you are saying you have 29 years of credits including the 23 years (ish) up to 6/4/2009. If you reach SPA after 6/4/2010 then you will only need one more year before SPA to qualify for the full basic state pension. So it is hard to see any benefit to paying class 3 contributions unless there is absolutely no prospect you will get that year in some time before SPA.

However any class 3 contributions relating to missed credits for the 2009/2010 tax year will in any case be at the £12.05pw rate even if they are paid now by someone who has suffered a delay getting a state forecast. The extension allowing payment at lower rates only relates to earlier years.

Any class 3 contributions relating to missed credits for the 2008/2009 tax year will be at the £421 per annum rate because you get 2 years from the tax year end to pay at the older rate (i.e. until 6/4/2011)

I’m not sure if that answers your question and it maybe you reach SPA before 6/4/2010 and need more years of credits. Post back if it doesn’t answer your question.

cepheus

No I wasn't aware that I could claim Jobseeker's Allowance (JSA) with significant savings from a redundancy payment. I do not receive a pension but I have paid into an occupational pension and opened up a personal one but will not draw on them until I am 55.

Can Jobseekers allowance be claimed after a period of unemployment or must it be started within a certain time from the redundancy?

SnowMan

I'm pretty sure contributions based JSA is only paid for 6 months after your job ends (not 6 months after when you claim) so if your job ended more than 6 months ago that probably rules you out.

You can't get it backdated either except in exceptional circumstances (e.g if you could show the DWP had mis-advised you).

Any pensions not yet in payment won't affect it.

Synonymous

Hi, this is probably a silly question, but I have just read Martin's article on pension boosting and it has me wondering...

A couple of years ago I had a letter to say I had not reached the NI threshold for that tax year with the options for topping up etc. At the time I was a student at Uni and had no idea about pensions except that it was a long way off.

I'm only 24 and don't see any reason why I would not reach the 30 years of contributions by 2052 (!), but just in case I'm missing something - is there any value in me topping up this year? I can't say which one it is without digging out the paperwork so just wanted an indication before I do that!

jem16

Synonymous wrote: »

I'm only 24 and don't see any reason why I would not reach the 30 years of contributions by 2052 (!), but just in case I'm missing something - is there any value in me topping up this year?

Probably not.

SnowMan

Synonymous wrote: »

Hi, this is probably a silly question, but I have just read Martin's article on pension boosting and it has me wondering...

A couple of years ago I had a letter to say I had not reached the NI threshold for that tax year with the options for topping up etc. At the time I was a student at Uni and had no idea about pensions except that it was a long way off.

I'm only 24 and don't see any reason why I would not reach the 30 years of contributions by 2052 (!), but just in case I'm missing something - is there any value in me topping up this year? I can't say which one it is without digging out the paperwork so just wanted an indication before I do that!

Nothing much to add Synonymous, you seem to understand the system perfectly. No obvious reason to consider paying voluntary contributions.

As someone reaching SPA after 6/4/2010 you will need 30 years of credits out of the 52 years of your working life time. So losing a few years while you are a student shouldn’t make any difference.

And remember you will have got credits automatically for the tax year in which your 16th birthday fell and the two following years.

Synonymous

Thanks for that guys, I'll stop worrying and forget all about it!