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

molerat

COPE is already factored in so you will get the figures quoted.

Happychappy

Hi, I have just checked my figures.
Forecast with figures based on national insurance record up to April 2016
£132.60, if I continue to contribute for a further 5 years £154.84, I have also seen my COPE figure as £119.84. I have 45 qualifying years NI.

I was intending to work till 2021 when I assumed I would get the full state pension of £154.84 on top of my local government pension which I currently receive. I am in full time employment, however, unfortunately I was diagnosed with cancer at Christmas and following an op I am now looking at retiring, not on an ill health pension.

I assume the annual update will add around £3 or £4 on to the current figure of £132, therefore if I retire end of this year I will be short of the maximum figure by around £18 per week.

Is the cost of buying an additional four years worth the approximate £18 per week increase in pension and what is the situation regarding my wife and any widows pension ? obviously if I don't get through the next 5 years and have paid out for additional years, I take it this really is wasted, sorry to be a little vague, but currently mulling over options etc.

Thanks HC

molerat

Each contributing year is worth £4.45 so with 2016/17 contributions your pension will be £137.05. If you pay additional contributions and you don't make it then it is wasted. You can leave paying for 2 years after the end of the year so for 2017/18 you will have until April 2020 to pay. There is no widow's inherited pension post 2016 except in limited circumstances. https://www.gov.uk/new-state-pension/inheriting-or-increasing-state-pension-from-a-spouse-or-civil-partner

SnowMan

Happychappy wrote: »

Hi, I have just checked my figures.
Forecast with figures based on national insurance record up to April 2016
£132.60, if I continue to contribute for a further 5 years £154.84, I have also seen my COPE figure as £119.84. I have 45 qualifying years NI.

I was intending to work till 2021 when I assumed I would get the full state pension of £154.84 on top of my local government pension which I currently receive. I am in full time employment, however, unfortunately I was diagnosed with cancer at Christmas and following an op I am now looking at retiring, not on an ill health pension.

I assume the annual update will add around £3 or £4 on to the current figure of £132, therefore if I retire end of this year I will be short of the maximum figure by around £18 per week.

Is the cost of buying an additional four years worth the approximate £18 per week increase in pension and what is the situation regarding my wife and any widows pension ? obviously if I don't get through the next 5 years and have paid out for additional years, I take it this really is wasted, sorry to be a little vague, but currently mulling over options etc.

Thanks HC

Because you already have over 35 Qualifying Years then you cannot increase your Starting Amount at April 2016 of £132.60pw.

So it then just depends whether you earn enough, or get credited with, or buy any post April 2016 Qualifying Years, which seems to be the 2016/2017, 2017/2018, 2018/2019, 2019/2020 and 2020/2021 years.

If you get those 5 years then that will take your state pension payable at State Pension Age up to the £154.84pw (= 132.60 + 5 x 4.45).

For the 2016/2017 tax year then you have until 5th April 2019 to decide whether you want to buy that year at the in-year cost of £733.20, if you don't get it automatically through working or credits. And for 2017/2018 the deadline for the in-year rate will be 5th April 2020.

So there is no great rush to do anything or decide.

If your wife reaches State Pension Age after 5th April 2016, then the basic position is that your wife can 't inherit any of your state pension. The assumption is that she will have built up state pension in her own right.

In the worst case scenario that you die before reaching State Pension Age, then depending on the age of your wife on your death she may be able to get a Bereavement Payment, and Bereavement Allowance (or Widowed Parents Allowance if you have dependant children).

Full payment if applicable of Bereavement Allowance and Widowed Parents Allowance (assuming other conditions met) do require you to have a near full national insurance record (although with over 40 Qualifying Years you can have 5 missing years). But if relevant (you probably won't ever have more than 5 missing years) that's probably overcomplicating and best ignored for the time being.

So the general position should be to just wait and see as there is no rush to do anything in terms of national insurance, and the position should be clearer in two or three years time.

(I assume you know about Personal Independence Payment by the way)

OldSocks

molerat wrote: »

COPE is already factored in so you will get the figures quoted.

That's good. Does that mean that another 9 qualifying years will give me the full 155.65 weekly payment from the state pension? In which case, at that point the COPE becomes irrelevant. Have I understood this correctly?

greenglide

The COPE is irrelevant whether you reach the maximum or not. It tries to be (and fails spectacularly at this) an estimate of the private / occupational pension you will get on top of the state pension.

molerat

OldSocks wrote: »

That's good. Does that mean that another 9 qualifying years will give me the full 155.65 weekly payment from the state pension? In which case, at that point the COPE becomes irrelevant. Have I understood this correctly?

COPE is already irrelevant as your pension is based on old rules entitlement, it is only used to determine which calculation is used for your starting amount. Another 6 years contributions / purchases will take you to the maximum £155.65 (providing there are 6 full post 2016 years before your retirement tax year). Whether it would be worth paying for the extra 6th year to only get 81p per week is debatable though.

Happychappy

SnowMan wrote: »

Because you already have over 35 Qualifying Years then you cannot increase your Starting Amount at April 2016 of £132.60pw.

So it then just depends whether you earn enough, or get credited with, or buy any post April 2016 Qualifying Years, which seems to be the 2016/2017, 2017/2018, 2018/2019, 2019/2020 and 2020/2021 years.

If you get those 5 years then that will take your state pension payable at State Pension Age up to the £154.84pw (= 132.60 + 5 x 4.45).

For the 2016/2017 tax year then you have until 5th April 2019 to decide whether you want to buy that year at the in-year cost of £733.20, if you don't get it automatically through working or credits. And for 2017/2018 the deadline for the in-year rate will be 5th April 2020.

So there is no great rush to do anything or decide.

If your wife reaches State Pension Age after 5th April 2016, then the basic position is that your wife can 't inherit any of your state pension. The assumption is that she will have built up state pension in her own right.

In the worst case scenario that you die before reaching State Pension Age, then depending on the age of your wife on your death she may be able to get a Bereavement Payment, and Bereavement Allowance (or Widowed Parents Allowance if you have dependant children).

Full payment if applicable of Bereavement Allowance and Widowed Parents Allowance (assuming other conditions met) do require you to have a near full national insurance record (although with over 40 Qualifying Years you can have 5 missing years). But if relevant (you probably won't ever have more than 5 missing years) that's probably overcomplicating and best ignored for the time being.

So the general position should be to just wait and see as there is no rush to do anything in terms of national insurance, and the position should be clearer in two or three years time.

(I assume you know about Personal Independence Payment by the way)

Hi Snowman
Thank you for your reply, my wife doesn't reach pensionable age until 2022, she currently has 40 years contributions and is in the same position as I am as she worked for a PLC which contracted out, so unless she stays in work till 66 she will receive £132 in 2022 unless she continues working.

I am as I have said, considering leaving work, but obviously concerned about trying to achieve the full state pension in 2021, if I do finish work I would not do so on a sick pension, and as I already have a LGAP of around £20k I do not receive any benefits or credits towards my NI contributions.

If I did leave, are there any credits I could claim that would go towards my NI annual contributions, I believe job seekers or other benefits are given NI credits, but I would not be looking to work ? I cannot with this employment reduce my hours from my full time 40 hours, and working full time is just becoming too difficult and tiring, so leaving is really my only option, and at almost 61 with my current medical condition, I am not exactly employable ?

xylophone

and working full time is just becoming too difficult and tiring, so leaving is really my only option, and at almost 61 with my current medical condition, I am not exactly employable ?

Too ill to work and under SPA - see https://www.gov.uk/employment-support-allowance/eligibility

Thank you for your reply, my wife doesn't reach pensionable age until 2022, she currently has 40 years contributions and is in the same position as I am as she worked for a PLC which contracted out, so unless she stays in work till 66 she will receive £132 in 2022 unless she continues working.

Consider buying years as Snowman has described?

molerat

Still tweaking. They have now managed to get the list of my NI years and the numbers to come out the same It was showing as 39 full, 6 not full but the list showed 6 not full, 34 post 75 full and 4 pre 75. They have now got the pre 75 up to 5 which is correct.