MIL retiring at 65 or redundancy earlier

mncollyer

My MIL has been working and paying into her state pension past her 60th birthday and will be retiring at 65 in September.
She has been given a chance to take a redundancy package before September but somebody has told her that she will get an enhanced state pension if she makes the last few payments upto her 65th birthday, is this correct as it is not something I have ever heard of.

Thanks Mark

tanith

I don't think you have to pay National Insurance contributions after you reach state pension age.. someone will come along who knows more I'm sure..
A bit of info here...http://www.direct.gov.uk/en/Pensionsandretirementplanning/TaxandNationalInsuranceinretirement/GettingyourtaxandNationalInsuranceright/DG_171912

jamesd

The state pensions have two parts:

1. the Basic State Pension. This is a fixed amount and is paid out at the maximum level after 39 years of payments, assuming she was born in 1947 or in any case before 6 April 1950.

2. the Additional State Pension. This is linked to earnings and it continues to increase for as long as you're working and paying NI contributions. Contributions to it used to be called SERPS but are now called S2P.

It seems likely that she is now over state pension age. If she was born on 6 April 1947 she'd have reached it on 6 April 2007. If so she is no longer paying NI and is not receiving any increases in the state pensions, for either type.

She might get an enhanced work pension but not state pension. Find out why the somebody thinks that she'll get more if she makes the last few payments and why they think she's still making any NI payments. It's probably misunderstanding on their part but maybe they know something about her specific circumstances that we can't know, unlikely though that is. Most likely is that they don't realise that a person over state pension age is no longer paying NI.

You wrote that she's "been paying into her state pension past her 60th birthday". How was she doing that? It won't have been through normal work NI because she's been over state pension age and not paying NI since age 60, unless her employer was wrongly deducting employee NI from her pay.

She can get an enhanced state pension by delaying taking the state pension. Or by suspending taking it for a while if she's already started to take it. She could get about 4% more for life by not taking it between now and September.

jackyann

I suggest that you contact the Pensions Agency. I have found them very helpful in calculating things like this.

McKneff

You dont pay NI after you hit 60 years of age.

She is either mistaken or if it has been deducted her employer has been deducting it when they should not have been.

Isnt it for 30 years NI for a full pension now James or was the 39 a typo


If she is being offered redundancy, tell her to grab it and head for the hills. If she just retires a few months after that she will leave without a bean.

I was thinking of retiring last year, hadnt told anyone and then they made me redundandt, had i just retired I would have just gone, going the redundancy way I left with a nice fat cheque.

jamesd

McKneff wrote: »

Isnt it for 30 years NI for a full pension now James or was the 39 a typo

It depends on how old you are. 39 and a 60 state pension age are correct for this specific woman.

It's 30 years for men born on or after 6 April 1945 or women born on or after 6 April 1950. Given the gender, age of 65 and a time when that age will be reached I could calculate the likely date of birth and work out that she's too old to have 30 years for the full basic state pension qualifying count.

She still may be able to buy back years if she doesn't yet have enough counting to get a full basic state pension. We don't know enough to know whether this applies.