How do I interpret my pension forecast? – Not enough contributions

mr_fishbulb

I have received my pension forecast and it say I have not paid enough NI contributions in 4 of the last 10 years. It has a table:

2005/2006 £382.20
2004/2005 £371.80
2000/2001 £281.65
1999/2000 £154.80

I’m only 26 so I gues I have to top some of that up. I have a few of questions:

1 – Is that amount a cumulative amount – i.e. if I paid £382.20 will I be fully paid up? Or is it a yearly amount – i.e. I have to pay £154.80 + £281.65 + £371.80 + £382.20 = £1190.45

2 – Tax years 1999/2000 and 2000/2001 I was at university. Do I have to make NI contributions whilst I am in full time education?

3 – Tax years 2004/2005 and 2005/2006 were spent travelling, some of it working in Australia. Does the UK and Australia have a reciprocal agreement so I can have some money transferred?

Thanks

BrianD

Hi Mr Fishbulb

Just read your post and the way I read it is that you have the opportunity of making those years count towards your state pension by paying the indicated amounts as class 3 contributions.

The choice is yours whether you pay any or all of them, but there are time limits for paying voluntary contributions.

bristol_pilot

You don't have to pay this. It may not be worth your while to do so, especially as you are young. You need (for a man) 44 years of contributions to get a full state pension at state pension age - 65 now but will increase by the time you get there. You get one year for each year of employment, official unemployment, year in (certian) full time education etc. (Go travelling for a year though and you do not have cover for that year).

In short, you can miss a few years and still get a full state pension. For example, I did a three-year PhD after I graduated and these years do not get NI cover. I was invited to make voluntary contributions a year after I finished my PhD to make up the deficit. I declined. I recently had a pension forecast and it showed that I am projected to have more than 44 years contributions and hence a full state pension when I reach the appropriate age. Thus that money I was invited to pay when I was in my twenties would have been money down the drain. It was better invested in the pub!

CIS

Under the current rules, you have a 5 years leeway in your NI record between 16 and 65 in which you dont need to pay NI, the forecasts shows missing conts whther you need to pay them or not.

The figures shown are not cumulative, they are shown for each contribution year seperately.(total £1190)

Whilst in education you need to pay NI yourself past the age of 18, juvenile credits only cover your from 16-17 and 17-18.

The reciprocal agreement for Australi ended, IIRC, in 2002.

The caution is that if they introduce the new rules as planned, you will only need 30yrs of conts as opposed to 44, 30yrs is something you can manage if you plan to work until your State Pension Age.
The forecast shows the final date to pay each year of contributions,next to where it shows the outstanding values, and it MAY be worth hanging on 6months - 1yr or so for the new pension rules to be confirmed.

Paul_Herring

CIS wrote:

The caution is that if they introduce the new rules as planned, you will only need 30yrs of conts as opposed to 44, 30yrs is something you can manage if you plan to work until your State Pension Age.

Citation please? This is the first I've heard of this one.

CIS

The 30yrs is the new system they are changing to, it has been confirmed by the minister that the plan will go ahead from somwhere around 2010

http://www.publications.parliament.uk/pa/cm200506/cmselect/cmworpen/uc1068-iv/uc106802.htm
see Q275