qualifying years for state pension.

Linton

spot1034 wrote: »

If you have not made sufficient contributions in a particular financial year, what is the DWP's present policy as to sending out notifications? I ask because I have received no communication since I stopped working (and not getting any automatic credits) and I assume this is because I had reached 30 qualifying years, which until last week was thought by all concerned to be sufficient for a full pension.

I am now wondering whether, following the shifting of the goal posts, I might now expect to receive notification about the recent years when I have not paid any contributions.

Not until the new system is approved by Parliament.

molerat

This is something DWP need to get sorted NOW. It must be a very simple exercise to get the SP [STRIKE]forecast[/STRIKE] statement to state something like "You currently have 33 years contributions. Under current legislation you require 30 years contributions for the full Basic Pension"

SnowMan

FLAPJACK wrote: »

The 2009 forecast said that I had a total of 33 years in the bag i.e full SP.

The (2012) Pension Statement said that I have a total of 30 years, giving me a full pension if I were of SPA now.

The current pension statements only show if you have over 30 years they don't show whether that is 30,33 or 35 or whatever. So it may be you have 33 years even if you did not get youth credits as you may still have been working age 16,17 and 18

Best to ring them up and ask them how many years you have, that clears it up once and for all

Not sure why the "Additional SP" forecast in 2008 was £8.45 pw, and now is £3.87.

It is possible for the additional pension to go down because of complications of the way additional pension is calculated when someone is contracted out.

Before 1997 for each contracted out period they would calculated what SERPS you would have received had you notionally contracted in and deducted what was called a contracted out deduction (COD). So your


additional pension = (notional SERPS) less COD

the thing was that the COD can increase up to SPA at a greater rate than the notional SERPS increases and so your additional pension can go down over time. If it all sounds a bit fishy that is probably why they called it COD. Sorry

I cannot see either if you are in this situation, if you can buy extra years to make up the difference.....and if you could would it actually be financially worth it in the long run?
Does anyone know if you can buy years (for this particular situation) and would it be worth it?

It is more complicated than you just having to have 35 years to get a full £144 pension.

The protected amount (foundation amount) at 2017 is calculated as the greater of

a) qualifying years/35 x 144 less a deduction if you have been contracted-out, and
b) your state pension under the old rules so with 30 or more years service this is a full basic state pension + additional SERPS

If your additional pension is 3.87, albeit it may decease further, and your qualifying years are 33 then this calculation is then the greater of

a) 136 (= 33/35 x 144) less a deduction for contracting out
b) 111 (= 107 + 3.87)

The trouble is until you know what the deduction for contracting-out is you don't know which of a) or b) is higher.

If b) is higher because the contracted-out deduction is more than 25 then buying an extra year may be wasted money because b) won't increase by you buying an extra year only a), and a) may still be less than b). So your foundation amount doesn't increase even though you have bought an extra year.

However it might then be worth buying an extra year AFTER 2017 because then you can then increase your foundation amount up to 144.

What Steve Webb seemed to be saying on Moneybox was that they would tell you you at 2017 what foundation amount you had and give you an opportunity to buy pre 2017 years then and allow you to go back quite a few years.

So while it is all very complicated and impossible to say for sure it would be best waiting until 2017 before deciding to buy extra years in my view. And of course the proposals may change.

vvvvvvvvvvvvvvvv

When you say these current pension statements only show if you have got 30 years and dont show if you have 35 or 36 for example.When did that start because my statement is from october 2012 and it tells me i have 39 qualifying years.

FLAPJACK

Hi Snowman,

Thank you for a straightforward answer...why can't the DWP site have answers like that. Had it said that in 2017 you may buy extra years then that would have saved all this.

I think you are dead right in saying to hang on until 2017 and see how the land lies then.....just have to remind myself nearer the time to check.

I will give them a call as regards the proper total....I can't see the point of not telling you the ACTUAL years you have instead of just confirming you have enough to secure a full SP (as it stands at the mo).

Of course I may have answered my own question there....probably the system was set up just to inform you if you have enough years and give you a figure if you have less....as this was put in place before the 35 years announcement was made.

Interesting that vvvvvvvvvvvvv says that he/she had a statement confirming 39 years though.

Anyhow I shall report back my findings once I have spoken to DWP.

Thanks again for taking the trouble to give a good reply.

Cheers.......

vvvvvvvvvvvvvvvv

FLAPJACK wrote: »

Hi Snowman,

Thank you for a straightforward answer...why can't the DWP site have answers like that. Had it said that in 2017 you may buy extra years then that would have saved all this.

I think you are dead right in saying to hang on until 2017 and see how the land lies then.....just have to remind myself nearer the time to check.

I will give them a call as regards the proper total....I can't see the point of not telling you the ACTUAL years you have instead of just confirming you have enough to secure a full SP (as it stands at the mo).

Of course I may have answered my own question there....probably the system was set up just to inform you if you have enough years and give you a figure if you have less....as this was put in place before the 35 years announcement was made.

Interesting that vvvvvvvvvvvvv says that he/she had a statement confirming 39 years though.

Anyhow I shall report back my findings once I have spoken to DWP.

Thanks again for taking the trouble to give a good reply.

Cheers.......

I filled this form in online,printed it off and posted it to them.

*wrong link

vvvvvvvvvvvvvvvv

vvvvvvvvvvvvvvvv wrote: »

I filled this form in online,printed it off and posted it to them.

*wrong link

right link

http://www.direct.gov.uk/pdfs/state-pension-statement.pdf

FLAPJACK

Thank you vvvvvvvvvvvvvvvvvv I'll get that in the post in the morning. I'll report back the results.

spot1034

There seem to be so many people in the position of having thought they were going to qualify for a full pension and now finding that they won't, that I suspect this will be an issue that is discussed at length when the bill goes through parliament. It's quite possible that some sort of scheme will be put in place (for a limited period) which would enable those who have a modest shortfall and are approaching retirement to make it up - maybe revive the old arrangement where men over 60 could get NI credits if they needed them - though obviously it wouldn't just be men this time!! I think it's certainly sensible to wait and see what happens.

SnowMan

FLAPJACK wrote: »

After trawling the Government Gateway site I found a section explaining the "Auto Credits" of NI contributions.

You are creditted with these between the age of 16 and 18....so that made sense of me getting 33 years.

However the 3 years have been withdrawn, they are only creditted if your 16/17/18 birthdays fell AFTER 06/04/75....mine didn't.
I cannot find anything about when this was decided.

Looking from this informative post that when they introduced the starting credits in 1975 they applied it retrospectively, so anyone say in their 20s (say) in 1975 got the credits for age 16,17 and 18 retrospectively.

So that would probably indicate you do have 33 qualifying years. But best to check it out of course