State Pension Max

MoneySaverLog

I understand that once you've paid into the State Pension for 30 years you are eligible for the maximum payout.

After 30 years paying in are the extra NI (pension) subscriptions worth making in this case. Is there any benefit to continuing beyond 30 years? Or is this just another way of gaining extra tax.

jem16

MoneySaverLog wrote: »

I understand that once you've paid into the State Pension for 30 years you are eligible for the maximum payout.

After 30 years paying in are the extra NI (pension) subscriptions worth making in this case. Is there any benefit to continuing beyond 30 years? Or is this just another way of gaining extra tax.

You don't have any option as to whether you continue paying or not. If you are working and below state pension age you will pay NI.

Remember that NI contributions are not just about the state pension.

dasherman

You now need 35 years of NI contributions to get the full state pension.

MoneySaverLog

dasherman wrote: »

You now need 35 years of NI contributions to get the full state pension.

Moving goal posts again :-(

They need to update their website....
https://www.gov.uk/state-pension/eligibility

luvchocolate

Its still 30 years at the moment, if the new £144 rate comes in 2016 it will then become 35 years.
At least that's the way I read it, but many brilliant people on here with the right answers, will be along soon

p00hsticks

luvchocolate wrote: »

Its still 30 years at the moment, if the new £144 rate comes in 2016 it will then become 35 years.
At least that's the way I read it, but many brilliant people on here with the right answers, will be along soon

Yes, that's right - and in relation to the OP's comment on 'changing goalposts' it's worth noting that the qualifying period has been only 30 years for a relatively short period of time - prior to 6th April 2010 it was 44 years for men and 39 years for women.

Pollycat

luvchocolate wrote: »

Its still 30 years at the moment, if the new £144 rate comes in 2016 it will then become 35 years.
At least that's the way I read it, but many brilliant people on here with the right answers, will be along soon

No, you're right, luvchocolate, it's still 30 years to get the full pension so the information in the link provided by MoneySaverLog is correct and doesn't need updating - yet.

tgon

Another example of why being in my late 50's and planning for my golden years is a seemingly unattainable goal. Such a disappointment.

dunstonh

tgon wrote: »

Another example of why being in my late 50's and planning for my golden years is a seemingly unattainable goal. Such a disappointment.

Not really. Not too many years ago it was 40 years. So, 35 is still lower than that. Plus, the uncertainty of knowing how much SERPS/S2P/Graduated you have will be replaced with a much more certain amount (although there will be a number of years where those that have qualifications under both will have to do a calculation).

The other positive is that you are statistically more likely to live many more years than was thought when you first started working life and planning for retirement.

jamesd

To get the maximum possible state pension currently takes around 48 years, a full working life. Maximum payout is around £250 a week or around £190 or so a week for a person working for life at minimum wage.

The state pension has two main parts:

1. the basic state pension. This is currently £110.15 a week. You're entitled to that after 30 years of contributions or credits.
2. the additional state pension. This is the earnings-related part that it was possible to contract out of into a personal pension. This continues to increase for as long as you're working and haven't reached state pension age, up to a full working life for your date of birth.

There is a proposal to replace both of those with a flat rate state pension of £144 a week. That's a substantial cut for those who spend a full or almost full life as PAYE employees but an increase for those who don't do much of that work. To get the full pension under this scheme would take 35 years. There would be no increase after 35 years, unless something like contracting out meant that you could work a few more years to get to the full £144.

wakeupalarm

jamesd wrote: »

To get the maximum possible state pension currently takes around 48 years, a full working life. Maximum payout is around £250 a week or around £190 or so a week for a person working for life at minimum wage.

I wonder if there is anyone who has actually acheived the maximum state pension through their own working life. There are probably are a few who have the maximum through inheriting a spouses serps/s2p but someone to receive the maximum in their own right would have to have a full working life at or above the 40% tax band from and early working age.