Basic Confusion on State Pension and S2P

darkvader

Hi,

I have been reading on the Direct Gov site and also going through various posts but have some fundamental questions to ask. From what I know
1. You have to pay 30 years NICs to be eligible for a FULL Basic State Pension. So if you only pay 20 years NICs, you stand to get 20/30th the Full Basic State Pension - Is this correct?

2. Is there a minimum contribution required? For example, if I pay NICs for only 5 years, will I get 5/30th of the State Pension?

3. Totally confused about the Second State Pension S2P. Read somewhere that you always contribute to both, the Basic and S2P when you work. Once you complete 30 years contributing to the Basic State Pension pot, your NICs still remains until retirement age but all your remaining NICs will go only into the S2P? Is this right? If yes, then makes sense for everyone to get the same Basic Pension (from what I hear of a single flat pension ahead) and differing S2P based on contributions and taxable incomes. So a basic tax payer will have a lower S2P than a higher tax payer.

4. Finally, how in the world do I get an idea of the S2P I will be eligible for? I have been a 40% tax payer for a while now meaning higher NICs and will be good to understand how much I have built up so far

Thanks
DV

molerat

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/DG_183774

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/Basicstatepension/DG_10014671

1) Yes

2) No longer a minimum since 2010

3) Quite a complicated thing to work out. If you are paying HRT then you will only be paying 2% NI above a certain point rather than 12% and you build up a lower S2p after that point. http://www.thisismoney.co.uk/money/pensions/article-1585149/The-State-Second-Pension.html

4) Get a state pension forecast. http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008

darkvader

molerat wrote: »

4) Get a state pension forecast. http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008

Thanks molerat, but this mentions only a State Pension forecast, which I tried and worked out. There was no S2P forecast included in this

Correction - From the article in point 3, seems like the S2P amount should be included but did not look like it at all!

CV

molerat

A proper SP forecast gives seperate columns for basic and S2P.