Shortfall in National Insurance Contributions

youngpensioner_3

Thanks for that Jancee !
:think: Hmmmm ! Even more confusing than I thought My husband says 'Why worry ! There may not be enough money in the state pot to pay you in 15 years time !!' He could be right bout like to get my facts straight - just in case ! Where's an expert when you need one ?

Damsonjam_2

jancee wrote: »

It depends. One of the experts will no doubt be along but as I understand it, when you take a pension early in this manner, it factors in your state pension entitlement kicking in when that starts, probably 65 in your case. So the question is whether the scheme payment will reduce by what you *actually* get from the state pension, or by what you will be entitled to [ie two years short of full pension].

(similarly waiting for one of the experts to chip in)
But in the meantime, I will share my current experience: having reached the ripe old age of 50, I've started receiving forecasts from my company - if I leave them anytime from now on they will pay me my company pension from the day I leave (no choice).

The way they work it: they reduce the company pension I'm entitled to by the (current) state pension (not my personal forecast). So at the ripe old age of 'whatever it is when I'm entitled to retire in the future' I will receive my full pension. Until that point, it is reduced..

youngpensioner_3

You got me thinkin' on that one Damsonjam so I dug out my pension statement ! The options that were available to me at 50 were - Option 1 an annual pension amount or Option 2 a lump sum plus a reduced annual pension. The statement says that 'the annual pension shown under Pension Options 1 and 2 include an annual temporary pension, payable to state pension age of £3719.56.Going on to read the notes that come with it 'At state pension age your pension from the scheme will reduce as your basic state pension and any additional state pension to which you are entitled will become due'. Don't know what you think but it seems to me like the company pension I now get will reduce by the amount of state pension I get - in other words CLAWBACK !! Well looks like I might be earning a pittance when I'm 65 and will have to go out to work :rotfl:

venetiadarling

Forecast & Shortfall. The Pension Service will now only send out the info by post - which can take 10 days - so if you need to top up before 9 April 2009, after which it will be more expensive - ACT NOW. Online takes ages as you need a pssword and ID - also sent by post.

jancee_2

venetiadarling wrote: »

Forecast & Shortfall. The Pension Service will now only send out the info by post - which can take 10 days - so if you need to top up before 9 April 2009, after which it will be more expensive - ACT NOW. Online takes ages as you need a pssword and ID - also sent by post.

5 April.

Also, some of the earlier years currently available are due to expire on that date. From 1996/7 to 2002/3 inclusive.

dougz_2

venetiadarling wrote: »

Forecast & Shortfall. The Pension Service will now only send out the info by post - which can take 10 days.

I am waiting over 10 days at the moment, so don't rely on them being within that. I am worried to hear they won't now tell you on the phone as I was hoping to get it verbally if they continue to fail to provide it me in writing.

Does anyone know how quickly you can sort out the voluntary payments? i.e does the forecast include how exactly how much it will cost, and do you have to send a cheque to be received somewhere by a certain time to beat the 5th April deadline?

jancee_2

dougz wrote: »

I am waiting over 10 days at the moment, so don't rely on them being within that. I am worried to hear they won't now tell you on the phone as I was hoping to get it verbally if they continue to fail to provide it me in writing.

Does anyone know how quickly you can sort out the voluntary payments? i.e does the forecast include how exactly how much it will cost, and do you have to send a cheque to be received somewhere by a certain time to beat the 5th April deadline?

The Pension Service relies on HMRC's record of one's NI contributions. That information is within the domain of HMRC so it's unrealistic to expect The Pension Service to reveal what your record says. It's down to HMRC whether they tell you what shortfalls you have or not.

A forecast does inform you of shortfall years, how much it would cost to make those years up and the effect on your State Pension. If you choose to pay voluntary contributions to make up years, then yes, the valid date is when the money is received by HMRC. Always request a receipt from HMRC - they don't send them automatically.

Shortfall enquiry line: 0845 9154996. Open 8 - 8 and Saturdays.

jamesd

The forecast tells you exactly how much you need to buy each of the individual years. You can choose any years you like and just add up the cost for each year to get the amount to put on the cheque.

At a less busy time of year I've had the Pension Service entirely happy to tell me on the phone my earnings every year of my working life and whether each year counted or not.

wonderman

My wife worked for 17 years before stopping to have children - that was about 11 years ago. Am I right to understand that the years of bringing up children will count to her final state pension - so at the moment she is on 28 years and only needs 2 more years bringing up kids to qualify for a full pension - and therefore no need to make extra NI payments?

How does the pension service know that she has been bringing up children - is it up to us to tell them?

seven-day-weekend

Wonderman, they know that she has been bringing up children if she has been receiving Child Benefit, that's why it should be in her name.

I think if her retirement date is after 6th April 2010, then she can only claim a maximum of twelve years for bringing up children (but I may be wrong here).

Best thing to do is get a Pension Forecast which will tell her what she needs to know (see link below).

http://www.thepensionservice.gov.uk/state-pension/forecast/home.asp