New State Pension starting amount and full record of qualifying years- trial service

SnowMan

waterstar wrote: »

Are "post April 2016 Qualifying Years "

(a) NIC contributions made in respect of years starting on or after April 2016, ie limited to 2016-17 onwards; or

(b) NIC contributions made after April 2016 which could include voluntary NIC contributions for years before April 2016, eg year 2014-15?.

Its (a).

I ask as i have a SP forecast (obtained in May 2015) of £115.95 with 30 qualifying years (mostly contracted out or voluntary contributions). I reach age 66 in 2022. Am I limited to further voluntary contributions only for the years 2016-17 through to 2021-22, which would only allow me to purchase 6 years. Or can i also make contributions for the earlier years to take me up to the NSPension limit?

These figures are clearly in 2015/2016 terms, as £115.95pw is the full basic state pension (and so I deduce you have no additional pension), and the basic state pension goes up because of the triple lock increase to £119.30pw for 2016/2017. If you add 6 more post April 2016 qualifying years that will increase your starting amount at April 2016 by about £26.70pw (= 6 x 4.45) taking you up to about £146pw in 2016/2017 terms (compared with the full single tier pension of £155.65pw)

There is a small possibility that there may be some value in paying voluntary contributions for missing (in time) pre April 2016 years.

That is because your starting amount at April 2016 is based on the higher of an old rules calculation (where up to 30 qualifying years are taken into account) and a new rules calculation (where up to 35 qualifying years are taken into account).

At the moment we are assuming that the old rules calculation is higher and that can't be increased by voluntary contributions (because you already have 30 years). But if (and that is a big if) the new rules calculation is close to biting then that calculation could increase, with the addition of extra pre April 2016 qualifying years (because up to 35 years are used) so that could take your new rules calculation above £119.30pw if you paid pre April 2016 voluntary contributions. And post April 2016 you can then add the same £26.70pw to that increased starting amount (at least until you get up to £155.65pw). That all depends on how close the new rules calculation is to biting.

Pennylane

SnowMan wrote: »

The £155.65pw for 35 Qualifying Years only applies to those entering the new state pension scheme after April 2016. You come under the transitional period where contracting-out complications apply.

The £135pw with 35 Qualifying Years takes into account contracting-out. You should have pension benefits in a private pension arrangement, relating to this contracting-out that should in theory get you up to about the £155.65pw. These benefits aren't necessarily separated-out from the rest of your private pensions.

You can earn an extra 1/35th of the new state pension for each Qualifying Year after April 2016, about £4.45pw until you get up to the full single tier pension of £155.65pw. So if you get 5 post April 2016 Qualifying Years you will get up to the full new state pension, and have your private contracted-out pension pot on top.

I got my paper forecast today. I can get my SP in July 2018 which is 2 years later than friends born just a few months earlier than me.:mad:

It will be £149.51. They are deducting £1.74 a week for a brief time when I contracted out. Total would be £151.25.

43 years NI Conts.

SnowMan

Does anybody know when 2015/2016 years information will be added into the records? I'm wondering as that is the point at which you can find out your precise starting amount under the new state scheme (assuming you don't buy any missing pre April 2016 years subsequently)

I remember many years back that statements used to say it could take up to 6 months after the end of the year to get that tax year updated.

Do things happen more quickly now?

bigfreddiel

SnowMan wrote: »

Does anybody know when 2015/2016 years information will be added into the records? I'm wondering as that is the point at which you can find out your precise starting amount under the new state scheme (assuming you don't buy any missing pre April 2016 years subsequently)

I remember many years back that statements used to say it could take up to 6 months after the end of the year to get that tax year updated.

Do things happen more quickly now?

If it takes up to six months to include the previous years NI contributions, how do they work out anyone's state pension if they are due to receive it in the six months following April?

Are you saying those who start receiving their state pension between April and September are receiving the wrong amount?

Cheers fj

greenglide

Are you saying those who start receiving their state pension between April and September are receiving the wrong amount?

No. Anyone whose award can be increased by the final year's contributions data (FRY data - Final Relevant Year) is given an initial award and when the FRY data becomes available the award is revised to give the full amount and arrears are paid.

It doesn't normally take anything like 6 months these days. The employers don't have long to provide the P11 data especially with RTI payroll data.

Yorkshire_Pud

If I have 35 qualifying years already and get my SP in 2022 why would I be asked to pay any further NI to accrue more 'qualifying years'? Why would 42 years get me any more pension when I'm already at the max? Its no longer 44 years, and i have 5 more years than the 30 years for the current scheme?

greenglide

If you have 35 qualifying years and have never been contracted out then you will already get at least £155.65 and you may get more if you have significant AP from the current system.

If you have been contracted out then your entitlement may be less than this but you will be able to increase it, if you wish, by voluntary contributions.

The new system doesn't promise to give people who have contracted out any more than the old system would gave given them. You haven't lost anything.

p00hsticks

Yorkshire_Pud wrote: »

If I have 35 qualifying years already and get my SP in 2022 why would I be asked to pay any further NI to accrue more 'qualifying years'? Why would 42 years get me any more pension when I'm already at the max? Its no longer 44 years, and i have 5 more years than the 30 years for the current scheme?

Because during the transitional period, for those who have already spent many working years under the existing scheme, 35 years does not necessarily mean you will automatically get the "full" amount - if any of those years have been contracted out there will be a deduction (similarly if you have paid S2P or SERPS you might get more).

So you need to get an individual pension statement to see exactly where you stand, and if the amount is less than the £155.65 maximum, you may have an opportunity to add to it by further NI qualifying years post 2016.

https://www.gov.uk/check-state-pension

bigfreddiel

greenglide wrote: »

No. Anyone whose award can be increased by the final year's contributions data (FRY data - Final Relevant Year) is given an initial award and when the FRY data becomes available the award is revised to give the full amount and arrears are paid.

It doesn't normally take anything like 6 months these days. The employers don't have long to provide the P11 data especially with RTI payroll data.

Seems that snowmans info is a bit out of date, but he did say that in his post, nice to know that it can be revised if it's not fully up to date, cheers greenglide, fj

Pennylane

p00hsticks wrote: »

Because during the transitional period, for those who have already spent many working years under the existing scheme, 35 years does not necessarily mean you will automatically get the "full" amount - if any of those years have been contracted out there will be a deduction (similarly if you have paid S2P or SERPS you might get more).

So you need to get an individual pension statement to see exactly where you stand, and if the amount is less than the £155.65 maximum, you may have an opportunity to add to it by further NI qualifying years post 2016.

https://www.gov.uk/check-state-pension

Not sure you're right. I'd read about this £155.65 amount but if you look at my example up the page that's not even mentioned. they reckon only 1 in 3 people will get the full 155.65 anyway.

You can't add to it either if you're over a certain age.