Pension Boosting article discussion

rhinestonemaiden

http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@shared/documents/digitalasset/dg_180385.pdf

The above is a link to the government document which states that a particular group of those in receipt of a state pension (who reached retirement between April 2008 and 2010) have a special opportunity which expires on 5th April 2011 to buy six years NI contributions going back to 1975 AND also get the resulting increased payments backdated to the date when they retired. If this group does not pay the contributions by 5th April 2011, they can still have the 6 years going back to 1975, but they WON'T get backdated increase payments going back to the date of their retirement. That's how I read it anyway.

I am one of that group referred to above who does not receive the full basic pension and I was told when I telephoned that I would get a letter in a few weeks confirming what contribution years are missing. I mentioned the deadline of April 5th 2011 and he said the deadline applied to the date pensioners get in touch about the boost (in my case yesterday) suggesting that as long as you register your interest before April 5th 2011, I would still be able to take advantage of the "special opportunity". So I assume I will still get my increased payments backdated to when I retired. But I will be checking the position carefully before buying any contribution years, as the government document above states very plainly that the contribution years have to be paid for by April 5th 2011.

harz99

donaldtramp wrote: »

Further to my last posts on here...


My mum has been in touch again and she is NOT going to get her payments backdated.
Before the turn of the century she had already bought 6 "cheap years" (at the time you could buy old years for cheaper than the £600 or so now)
The years she just bought back now were 02/03/04/05. A line has been drawn apparently that years after the turn of the century don't count. Strange as there is with no mention in any of the info I've read.
So looks like no backpayment stands in the eyes of the government:(

I have sent a private message to both MSE Wendy (who forwarded same to MSE Guy) and MSE Guy about this matter, unfortunately MSE Guy has not responded (yet)!!

It seems that either the advice on MSE is incorrect/incomplete, or HMRC are working to a different set of rules to the ones available to the general public to see.

donaldtramp

harz

I have sent a private message to both MSE Wendy (who forwarded same to MSE Guy) and MSE Guy about this matter, unfortunately MSE Guy has not responded (yet)!!

It seems that either the advice on MSE is incorrect/incomplete, or HMRC are working to a different set of rules to the ones available to the general public to see.

Thanks for that!
I'm not sure if MSE have got the info right or wrong.
I am sure that whatever the rule (that HMRC is using so that they don't backdate the pension to when my mum retired) isn't in the public domain.
My mum was told that she has 4 weeks to appeal the results of her payments.
That was a week ago.
3 weeks left, and we've no grounds of appeal and no hope (at present!) of getting the rebate!:mad:

Do you guys think that we just lodge the appeal and state that all documentation and adavice from the government state that my mum should have had her pension backdated??

Elines

harz99 wrote: »

All I can suggest is you do what I did and ring the Gateshead office at the number on that letter, and ask the same questions I did about time running out etc.

Just to confirm - I did phone the Gateshead number - 0191 21 87566 and was told that my wife would have 28 days from the date of the letter they would be sending out - unsurprisingly they have quite a backlog it seems.

harz99

Well despite the claim being put in during April and HMRC cashing my wife's cheque for £2542 on 4th May it is only now that this matter has been fully dealt with. She ended up buying 5 years back; 1 pre 2000 and 4 post 2000.

We had hoped for more years but got caught in the Home Responsibilities trap, where she had done some part time work for pin money whilst our children were young which, although not enough to generate NI contributions of any sort, was enough to disbarr her from qualifying for HRP.

Anyway, she has had a rebate of £564 from the sum paid to HMRC and is now getting a pension of a shade over £104 per week including all the other bits from the various schemes.

So at an overall increase of £13.27 per week it will take around 2 years and 44 weeks to get back the balance of the buy back sum paid.

After that she will start to make a return on her "investment", assuming she enjoys continued good health!

Was it a good deal? Maybe, tbh I am not sure, but no doubt someone more qualified will be able to give a view.

Lastly; if anyone is still waiting payment, my advice is to keep in touch with the Gateshead office by phone as some claims seem to be stalling/slipping to a halt due to the sheer volume of work and the different goverment offices involved.

donny_jim

jancee wrote: »

Get a pension forecast.

Depending on your date of birth you need either 39 or 30 qualifying years. If the former [born before 5 April 1950] you need at least 10 years working to get any pension in your own right. Maximum Home Responsibilites Protection for years in which not working but receiving Child Benefit are 19 if 39 years required, 22 if 30.

Married women can claim a 60% basic state pension when their husband is 65 and claims his pension. [Just when he's 65 if after 2010]

my wife did just that as with the tax code rise she no longer pays n.i. or tax. in my opinion the answer was a waste of time we wanted to know if she needed to pay voluntary contributions she was told she doesnt but i dont think that is right.
she had a forcast about 6yrs ago, the new one was completely different.

jem16

donny_jim wrote: »

my wife did just that as with the tax code rise she no longer pays n.i. or tax.

NI is nothing to do with tax and a tax code will have no bearing on paying NI. If you are under state pension age and earn at least £102pw you will be credited with NI. Paying NI is due on anything over £139pw. If your wife pays no NI it's because she earns less than £139pw.

in my opinion the answer was a waste of time we wanted to know if she needed to pay voluntary contributions she was told she doesnt but i dont think that is right.

Why don't you think that's right?

she had a forcast about 6yrs ago, the new one was completely different.

It will be. 6 years ago your wife would have needed 39 years NI contributions for a full state pension. Now she only needs 30 years.

Kew2u

I've just been looking at the Defered Pension calculator on here. I defered 2 years ago, seems I won't benefit if I claim my full pension now until about 5 years have passed. Is it better to claim my pension along with the extra amount now and put it in a bank to gain at least a little interest?
Also, it seems that if I claim a lump sum now, I will have to pay 20% tax on the extra. Hardly an incentive to defer?
Do both the above have a better option?

gadgetmind

Kew2u wrote: »

Also, it seems that if I claim a lump sum now, I will have to pay 20% tax on the extra. Hardly an incentive to defer?

Is that a deferred state pension? If so, you pay tax at your marginal rate BUT the lump sum doesn't push you up tax brackets or affect age related personal allowance. If your other income doesn't exceed your personal allowance, it could well be tax free.

You need to research this rather carefully and take a lot of care regards timing of the claim.

Kew2u

Yes, Gadget'...it is the State pension I refer to, it does seem that claiming the state pension now and placing it into a long term savings a/c will be better than not claiming it. I do have a private pension which I just about live on and which is about the same as the state pension. To place the state pension into a savings a/c might also make my Will easier to deal with. The main concern is, if I claim my SP now, it will poss put me into a higher Tax Paying bracket. What a mine-field. How ordinary ppl are supposed to decide what's best is beyond me. Tx for your input, food for thought.