Pension Boosting article discussion

Colly_2

worker800 wrote: »

As advised on this site I have just been on to the Inland Revenue who advised me that I was short on 3 years NIC and to pay them I must contact Pension Forecasts on 0845 3000168. They took details and said I can't pay until I have received their Pension Forecast which will take about 10 days to arrive. I explained that would probably take me over the 5 April 2009 and I would have to pay at the higher rate. They agreed but there was nothing they could do about it. I said I was willing to pay here and now but no I had to wait for their Forecast to arrive. This is so wrong, what can be done, I'm at a loss. This is going to cost me an extra £1000!!!! I'm so angry I don't know what to do and writing this hasn't made me feel any better. Any suggestions on how to beat this system?

I can well understand your anger. From my own experience I am entirely convinced they are deliberately delaying applications until its too late .

2 years ago at age 60, I received a state pension of 85 pence per week (this is not a typo) . Shortly after, thanks to Moneysavingexpert and radio programme, I found I should have received notifications of my NI contribution shortfall (but never had). I spent TWO YEARS trying in vain to get a copy of my NI contribution records, get my HRP entitlement agreed, receive a decision on how many years NI contributions I could buy back, and a forecast of pension boost if I did. Countless phone calls bounced around HM pensions and HM customs and excise ("we have a backlog. you would only qualify for £20 per week. Your case is so old its been archived. I can't get the records. We have another backlog .HMIR have a backlog holding us up") ! Finally, in January 09 with April deadline approaching, I found the first person who admitted he had access to my records and sent me an incredibly scruffy photocopy of my NI contributions with the figures, permission to buy back 10 years, an even scruffier form to fill in, and a warning of "departmental backlogs" .Same old excuse I'd heard many times. (I had always wondered, how departments which "had no access to my records" had ever managed to calculate my 85 pence pension in the first place).

I sent off the form and a cheque for £3,600, recorded delivery and copied the correspondence to my MP and MSP with a cover letter saying I'd been giiven the run-around and explaining my claim had to be processed before the April 2009 deadline. I copied that "MP" letter to the pensions dept. Both politicians immediately contacted HM pensions dept about my case.

Days later I got a phone call from a very charming, helpful lady in the pensions department, who said "Telephone wires have been humming about your case and its all sorted out, your pension will now be £58 per week (yes, from 85p) plus we owe you backpayments to your 60th birthday of £4600 which will be processed into your account today".(it was).

So, I invested £3600 to buy back maximum permitted years; and received a £4600 backpayment; plus £3000 per year for life, state pension in my own right (tax advantage for my husband when he recieves his SP in 4 years time). Pretty obvious why HMG don't want too many of us to succeed in claiming it. Saints help women who are less articulate or persistent, don't have internet access, and can't
put up the cash ahead of their backpayment entitlement.

Do what I did; contact your MP, let the pensions dept know your MP is on the case , send the dosh by recorded delivery , and good luck.

Colly

expat_mike

kokma_nick wrote: »

Further to my post as above, does anyone know whether it is possible to ask my question of the REvenue and Customs BY E-MAIL

Only telephone numbers are shown on their website, i am overseas and do not wish to incur unnecessary expense holding on listening to music

I sympathize with you as I too live overseas but my experience with ALL government bodies as well as ALL financial institutions in the UK is that they do not enter into any correspondence via E-mail. You may get a curt response to call them them at your cost and time but as far as getting a reply in writing via this communications channel is nigh on impossible. Even using low cost Skype to call them is blocked by the computerised call centres requiring you to enter a range of keys in a vain attempt to talk to a human being. As a pessimist, I believe its a deliberate ploy to allow them a get out to save money by making it virtually impossible to get at the true facts and make a valued judgment on what financial steps to make.

Mike

expat_mike

Magcar wrote: »

I have paid National Insurance contributions for approximately nine years, five of those with the married women's stamp. I received Child Benefit for approximately twenty-five years. I was led to believe I should pay six years shortfall to make up my pension but then read that married women needn't do this. What should I do please?

For married women with very low NI contributions in their own right its unlikely they can improve their pensionable income by buying extra years in their own pensions. This is just one of the unadvertised aspects of the state pension by Gordon Brown and his attempts at manipulating the state pensions. Provided your spouse has contributed or will have contributed the full number of years for 100% state pension in his own right, you will be able to claim 60% of the basic state pension off the back of his contributions. This won't cost him or you a penny other than any income tax liability (unlikely in your case) and even after the recent changes in topping up a state pension, its very unlikely you can end up with more than 60% in your own right. Remember also, for every pension amount in your own right, this will be subtracted from the pension obtained based on your husbands contributions. In other words, they'll take away in one hand what they give out with the other nullifying the benefit of buying extra years. Additionally, your 60% pension will remain upon the death of your spouse by renaming it a widows pension. Another point is the basic state pension should be about £95.25 for someone who has paid in the full contributions and you would get 60% of that. For people of a certain age who have paid into the system there is also a payable additional pension and a graduated pension, however this is not payable to the wife on top of the 60% based on the husbands contributions. I hope this helped as my wife will get 56 pence a week in her own right but should get around 60 pounds a week on the back of my 42 years of contributions. Finally, a lady at the dept of work and pensions did confirm to me when pressed that its pointless topping up pensions for women with very low NI contributions and only those with some 20 years or more could find it worthwhile if the calculator supplied in this article shows a benefit.

Regards

Mike

expat_mike

AirCooledHeaven wrote: »

You can get a forecast on line. You have to register and wait for an activation code in the post but this will be with you in a week. So you should be able to have a forecast before the deadline.

I'd put one small but very significant caveat on getting a forecast on-line and that is you have to be a UK resident. I tried to register from Spain to no avail as they won't allow it. I then sent several emails and letters to the pensions department claiming discrimination over this point and highlighting that there are no technical reasons why I shouldn't be able to register from anywhere in the world but they refused to answer my questions or give any reason why they refused ex-pats access to this. I hope you're a UK resident otherwise your SOL !

XQmcZ

Hello

Could someone please help? I never realised that pensions could be so complicated...

I'm trying to decide whether it is worthwhile my wife paying extra Class 3 contributions. If she does a cheque will go off for the current rates along with a note, I've given up waiting for a forecast.

Do years where she has only worked for 6 months count? Is there a table going back years giving the minimum amounts paid in NIC to qualify?

A rough calculation tells me she will have 28 and 3/4 years taking into account HRP. She has now finished work but doesn't reach SPA till 2013.

Would it be worth buying two years? Or would it be a waste of time as I have completed 38 years, making me wonder if she would get some of my pension-my SPA is 2015.

If she buys two years, can she pick the cheapest in the last four, ie 06-07 and 07-08?

Sorry for so many questions, hope someone can help.

X

EdInvestor

expat_mike wrote: »

Additionally, your 60% pension will remain upon the death of your spouse....

Upon the death of your spose, your 60% pension will be increased to 100% of his pension.A divorcee can claim a 100% pension based on ex-husbands conts from the start.

For people of a certain age who have paid into the system there is also a payable additional pension and a graduated pension, however this is not payable to the wife on top of the 60% based on the husbands contributions.

Additional state pension (aka SERPS/S2P) can be inherited, most will be eligible for 50% of spouse's entitlement, a few older people may get 100%.

Finally, a lady at the dept of work and pensions did confirm to me when pressed that its pointless topping up pensions for women with very low NI contributions and only those with some 20 years or more could find it worthwhile

This is in general true under the old rules.However the new rules applying to those retiring after 2010 change the position very drastically and even people with very low NI conts can now benefit by topping up.

EdInvestor

XQmcZ wrote: »

A rough calculation tells me she will have 28 and 3/4 years taking into account HRP. She has now finished work but doesn't reach SPA till 2013.

Would it be worth buying two years?

Under the new rules she only needs 30 years to get a full state pension, so you should probably complete the partial year and buy one more.It's best to wait for the pension forecast.

wary

I'm a bit confused re how HRP works, and whether it is a complete substitute for having paid NI. If someone reaches state pension age requiring 30 years contributions, and has 20 years of NI payments and 10 years of HRP say, will they be entitled to the full state pension in the same way as if they'd paid 30 years of NI?
Please can someone confirm?

SnowMan

wary wrote: »

I'm a bit confused re how HRP works, and whether it is a complete substitute for having paid NI. If someone reaches state pension age requiring 30 years contributions, and has 20 years of NI payments and 10 years of HRP say, will they be entitled to the full state pension in the same way as if they'd paid 30 years of NI?
Please can someone confirm?

I can understand the confusion. HRP currently works by reducing the number of years required to achieve a full state pension rather than by being a normal credit for the year.

However the system is changing from 6/4/2010. Up to 22 years of HRP years (prior to 6/4/2010) will be converted to normal credits under the new system. From 6/4/2010 people looking after children (for example) will then accrue normal credits although the qualification rules are changing a bit (for example only applies to children under 12)

In your example of someone reaching SPA after 6/4/2010 (presumably) you can effectively think of the HRP years as normal NI credits because of the upcoming conversion mentioned above. So yes with 30 years total the full state pension would be paid from SPA.

There is some good information on the existing system for HRP and the forthcoming changes as well, on the Pensions Advisory Service (TPAS)website at

http://www.pensionsadvisoryservice.org.uk/state_pensions/home_responsibilities_protection/

TPAS also have a helpline that you can call for advice, I've heard they are very good. So worth trying them if it is still confusing you.


More detailed information can be found on P23 of NP46 which can be downloaded from

http://www.pensions.gov.uk/resourcecentre/employers.asp

and explains the current rules for HRP and when credits are given (or how they are claimed in some circumstances).

wary

Thanks SnowMan, you're a wealth of knowledge!