Shortfall in National Insurance Contributions

EdInvestor

GWEPM wrote: »

I had thought that the changes were to allow one to purchase any previously missed year - in my case 1976!

You can purchase years from 1975 on, so you should be OK.You need to have already clocked up 20 years and to be retiring after April 2008.

GWEPM

EdInvestor wrote: »

You can purchase years from 1975 on, so you should be OK.You need to have already clocked up 20 years and to be retiring after April 2008.

EdInvestor,_ I appreciate your help but this doesn't seem to tally with your previous comments when you said one can buy only up to 10 years ago. 1975 is 34 years ago! Or have I misunderstood you?
My "missing" year is 1976.

Or, alternatively is there any way that I can make the current year count when I will have paid 47/ 52 weeks by my retirement date?

EdInvestor

Under the normal rules you can buy back the last 10 years (up from 6 due to an error at the moment) but only those.

After a lobbying campaign the Govt recently allowed a one-off buyback of an additional 6 missing years. These years can be purchased from next April. These years must not be earlier than 1975 and there are various other qualifications that have to be met..

I suggest you talk to the Pension Service about your queries.

GWEPM

Thanks, that is clearer now. It is as I thought, I have to wait until after April, by which time the price hike will have kicked in. Still, at least it is only one year!

The cheapest thing would still be if I could get this final year (47 weeks) counted as a qualifying year!

And I did talk to Pension Service. They referred me to HMRC who were very vague. They could tell me the price of contributions, but couldn't say if I was entitled to buy them! Perhaps I will try again and se if I can get hold of a different advisor.

seven-day-weekend

You may dfind your final year counts.

In 2004 I worked from the beginning of the tax year in April until early September and the year counted for Pension purposes.

It depends upon how much you earn, I think the bottom limit was something like £4.5k for it to count.

I only worked three days a week, and my year counted, so you may be OK.

Ring the DWP and ask them about this, I did and found them very helpful

jancee_2

The last tax year that counts towards state pension is the complete tax year before the one in which you reach state pension age.

GWEPM

Jancee, Thanks for your reply. You sound very certain of that!
It does seem very unfair for those who have a birthday in March. I have paid over £1800 in NIC contributions this year and whilst I appreciate it is not all about pensions, it does seem unreasonable that none of that counts.

Where is this sort of detail written down?

millie

My birthday is at the end of February and I did not realise that year did not count either. I reached 60 two years ago but have deferred my pension. I was quite a few years short of contributions for a full pension which I cannot pay back because I paid the small stamp for a number of years when I was first married. I am really annoyed to learn that almost a full years contributions do not count.

seven-day-weekend

When I said my partial year counted, it wasn't a final year before retirement, it was when I stopped work at 54.

My birthday is at the end of January, so if I'd been working mine wouldn't have counted either under the old rules (I believe it would under the new ones for people who reach retirement age after April 2010).

Fortunately I now have a full State Pension. When I gave up work, I had 24 paid years and 13 years HRP, so I only needed to pay two years of Voluntary Contributions which I have now done. My retirement date is January 2010.

jancee_2

GWEPM wrote: »

Jancee, Thanks for your reply. You sound very certain of that!
It does seem very unfair for those who have a birthday in March. I have paid over £1800 in NIC contributions this year and whilst I appreciate it is not all about pensions, it does seem unreasonable that none of that counts.

Where is this sort of detail written down?

It's referred to here, for one:
http://www.dwp.gov.uk/asd/asd1/state_pension/StatePension.pdf

For those who think it's unfair, think of the first year in which your NI contributions are counted. Say you are born on 5 April then your FRY [final relevant year] ends on the previous 5 April. Sounds unfair. BUT. Your [5 April person] first relevant year began a day after you were 16* years old whereas someone born 6 April would likewise have to wait a day short of a year for the first year of accrual. Their 'first' relevant year wasn't counted. Swings and roundabouts.

*The first three years are given by juvenile credits. But the 'effect' is the same.