married woman with few NI contributions

sheerluck_2

I am a 55 year old married woman. I paid NI contributions from 1977 to 1980 whilst working and then became a “ stay at home mother “ and housewife, mostly because my husband worked away a lot and when at home worked irregular and unsocial hours. My getting a job would have meant that we didn’t see each other or the children as much as we would have wished. We assumed that I would have no entitlement to a state retirement pension other than one based on my husband’s contributions , what used to be referred to as a “married woman’s pension “
We were fortunate enough to be able to save and plan for our retirement.
We have ISAs, company pension @ ¾ final salary, AVCs , cash and a property to fund our retirement.
I have recently been told that I can claim 16 years home responsibility credits and also make a one off payment to buy missing years NI credits to enable me to receive a pension in my own right.

Is this correct ? and is it worth doing?
If I am reading the Direct gov site correctly, then I can pay £655 per year for 8 years and this would boost my pension from £74 to £102 weekly.

In 2011/12, 22 qualifying years is worth approximately
£74.91 a week
In 2011/12, the full basic State Pension is worth
£102.15 a week

On the other hand , if the government brings in it’s planned proposal to a flat rate pension for all, would this payment be wasted?
Also if my husband were to die ( perish the thought ) then I assume I automatically get the £102 rate of state pension under current legislation anyway

Any advice and information would be gladly received, this whole area is one which we didn’t think would affect us and I am unfortunately way out of touch
Thanks

molerat

Get a state pension forecast https://secure.thepensionservice.gov.uk/statepensionforecast/ It will show how many years you have accumulated and which years you can buy back and at what rate, you can only buy back up to 6 past years . Unfortunately I believe you have missed the boat for some cheap years.

The big question is whether or not it is worth buying the extras with the current proposals.

tanith

I found the Pension service people very helpful it might be worth giving them a ring and ask them..

sheerluck_2

Thanks, I have registered on the pensionservice site as recommended by molerat and will definitely ring them after reading their advice

jackyann

You shouldn't need to "claim" home responsibility payments (which came in in 1978) - if it was your name on the Child Benefit Book, they would have been credited automatically - you will of course, see this in your pension forecast. I got one and found it very helpful and very clear to understand.
I had to make a decision about a pension annuity, so I gave a myself a nominal "death date" (!). Your local council will have an information page with demographics showing the average age of death for men & women in your area. I factored in family history and reckoned I would at least make that, and did my sums on that basis.
I have yet to know if a runaway bus will spoil all my calculations!

jackyann

I too found the forecast very clear & helpful. You normally don't have to "claim" home responsibility payments - if your name is on the Child Benefit Book, since 1978, you will have been automatically credited with them (as long as they had your NI no. which they normally asked for. They continue until the child is 16, so normally your youngest child.
So I think your credits may be more than 16 years, as they will be from birth of oldest to youngest's 16th birthday.
Check it out.
Sorry for the double post! Got confused!

sheerluck_2

jackyann wrote: »

I too found the forecast very clear & helpful. You normally don't have to "claim" home responsibility payments - if your name is on the Child Benefit Book, since 1978, you will have been automatically credited with them (as long as they had your NI no. which they normally asked for. They continue until the child is 16, so normally your youngest child.
So I think your credits may be more than 16 years, as they will be from birth of oldest to youngest's 16th birthday.
Check it out.
Sorry for the double post! Got confused!

Ah, right , thanks.

Yes the Child benefit was in my name and will exceed 16 years. It's quite a surprise after all these years to find that i might be entitled to anything at all.

gadgetmind

My wife got 16 years for raising a child, three years while in higher education, and a few years for actually working.

She's got a few years left to go to hit the 30 required and we've therefore registered her as self employed and we're voluntarily paying the required £2.60 a week for class 2 contributions. The downside is they'll probably require her to submit a tax return, but we can do this online and we'll declare a few bob that the business has brought in.

We were going to put her down as a busker, but we then realise that this would crank up the car insurance, so we finally sent for something horticultural as this was cheaper than housewife!

jamesd

You appear so far to have:

• 3 years juvenile credits (if not working as a young person)
• 16 years home responsibility credits
• between 2 and 4 years from 1977 to 1980 depending on whether the payments were sufficient to count.

That's 21 to 23 of the 30 years needed to get a full basic state pension in your own right. At the moment you'd get say 23/30 * £102.50 = £78.58 a week. 21/30 = 70% of the full payment, 23/30 = 76.7%.

If you were to rely on your husband's record the maximum you could get would be 60% of his payment so you're already likely to get more than the £61.20 you could get by relying on his record.

The plans for a flat rate pension combine basic and additional state pension but appear likely to be pro-rated based on qualifying years. If so, the effect for you would be to further increase the value of any years that you purchase, since the full rate would become say £140 instead of £102.50.

It seems likely that it will be in your interest to buy more years. Once you know how many you will need you can plan when to buy them. It's hard to say whether waiting for the possible £140 flat rate pension or not will be a good idea. The cost of past years was increased after some recent changes so it could be more expensive to wait than buy now.

Since it is cheaper to buy for the last two years than older years I suggest that you consider buying just the ones at the low rate, then one year at a time but no older and more expensive years. This is hedging the chance of higher costs later but not paying any extra cost to buy older years.

No way to tell whether this will turn out to be best, it just looks like a reasonable plan.

gadgetmind

jamesd wrote: »

I suggest that you consider buying just the ones at the low rate, then one year at a time but no older and more expensive years.

Even cheap class 3 years cost a lot more than class 2 years. Of course, this approach is better if you do run a business, but even (for instance) casual babysitting is OK, and I know someone who's registered as a self-employed sage.

Just make sure you don't earn more than £7225pa as this is when class 4 cuts in.

jackyann

can I say something that may not be helpful to OP, but might to others stumbling on this thread? I am a similar age to OP and made the same decision about staying at home with the kids for the same reason. But I come from a long line of feminists, and especially a mother who was aware of the battles for women's financial independence and advised me to check out all my entitlements so that I was assured of a state pension. she was delighted to find that I was one of the first cohort to get home responsibility credits.
I did return to work when the family situation changed.