Fixed rate pension introduction brought forward

monkeyspanner

It appears the government has decided to bring forward the introduction of April 2016. To qualify I believe the number of NI years has been raised from 30 to 35. Does anyone know what will be the position for anyone without the necessary NI years? I need to review whether to buy additional NI years.

scotsbob

You can pay contributions for past years. How many you can pay for depends on the years.

This page should assist you.

http://www.pensionsadvisoryservice.org.uk/state-pensions/voluntary-national-insurance-contributions

p00hsticks

I donlt know the exact details - they may not even be determined yet, as this is still a proposal and not set in stone - but I imagine that - as now - if you do not have the necessary contributions for a full pension then you will get a partial one, based on the proportion of contributions you have paid.

So for example, if you have 27 years full contributions, under the current system you'd get 27/30ths of the full pension, under the new scheme 27/35th of the new (higher) rate (with further adjustments depending on whether you have been contracted in or out at any point.

Arthurian

You can pay additional voluntary contributions to make your years up from 30 to 35, BUT only going back 6 years. This means that, as you wait for the government to make it's mind up, you could lose out on being able to pay a lower amount for any of those 6 years where you might have worked for part of the year. For example, say 5 years ago you worked for a few months - paying some NI contributions, but not enough to make a full year's payment. This means you owe, say, just £25 for that year. You have to decide to gamble on paying for that year before it drops off the six year timeframe, and your opportunity is lost forever, or not paying now, and so possibly having to pay the full amount (hundreds) for each of your missing 5 years later on, when the legislation is finally brought in.

That's my understanding, anyway.