LGPS ASP Newsletter

saver861

jem16 wrote: »

Not necessarily. I have 41 years Ni and still have 6.5 years till spa. Didn't start work till age 21 either.

I can't quite get to the full £155 but I can get close.

Yes - I think it works out you need about 8 years between April 2016 and spa to make up the full difference between the max basic at £119 and the max new pension at £155.

Of course, for those buying the additional years, that is about £700 per year. Thus it will take nearly 4 years to get to breakeven. Still a very good return depending on health etc.

pandora205

jem16 wrote: »

There is a way after April 2016 either by continuing to work or paying voluntary NI contributions.

That's good news thanks

pandora205

jem16 wrote: »

Not necessarily. I have 41 years Ni and still have 6.5 years till spa. Didn't start work till age 21 either.

I can't quite get to the full £155 but I can get close.

I have 3 years 2 months to go! I started work at 17 but had some time out as a student and in child care when the children were small but it looks like I've been credited for those.

Wentthedaywell?

saver861 wrote: »

Yes - I think it works out you need about 8 years between April 2016 and spa to make up the full difference between the max basic at £119 and the max new pension at £155.

Of course, for those buying the additional years, that is about £700 per year. Thus it will take nearly 4 years to get to breakeven. Still a very good return depending on health etc.

I hope to retire at 60 in late 2017 after 37 years. I will only have a year and a half under the new system . Where do I find out about buying additional years? I've seen info relevant to people older than I, but it didn't apply to me.

saver861

Wentthedaywell? wrote: »

I hope to retire at 60 in late 2017 after 37 years. I will only have a year and a half under the new system . Where do I find out about buying additional years? I've seen info relevant to people older than I, but it didn't apply to me.

There you go. You will find all the info on there.

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

Voluntary contributions are around £14 per week or just over £700 per year. It will take around 4 years from when you start drawing your pension to get to the breakeven point.

Wentthedaywell?

saver861 wrote: »

There you go. You will find all the info on there.

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

Voluntary contributions are around £14 per week or just over £700 per year. It will take around 4 years from when you start drawing your pension to get to the breakeven point.

Thanks Saver. Does this apply to my situation though? It seems to refer only to "gaps". I'll have worked continuously for over 38 years, so it's not gaps but contracting out that's my issue.

Sorry if I'm being thick.

hyubh

saver861 wrote: »

There you go. You will find all the info on there.

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

Hang on - are we still talking about an ability to 'double dip' and earn the ASP fraction of the single tier pension despite having spent a career contracted out...?

saver861

hyubh wrote: »

Hang on - are we still talking about an ability to 'double dip' and earn the ASP fraction of the single tier pension despite having spent a career contracted out...?

No - my understanding from the query was how can he/she make up additional years after 2016.

Wentthedaywell? wrote: »

Thanks Saver. Does this apply to my situation though? It seems to refer only to "gaps". I'll have worked continuously for over 38 years, so it's not gaps but contracting out that's my issue.

Sorry if I'm being thick.

Ok - in terms of gaps, anyone who has had gaps before 2016 *and* has less than 30 years will be able to buy those years. If someone has over 30 years there would be no point.

If you want to stop working after April 2016 but have not reached spa, then you can buy voluntary contributions in the same way to make up your pension up to the max £155.

xylophone

Where do I find out about buying additional years?

http://citywire.co.uk/new-model-adviser/news/steve-webb-how-to-boost-new-state-pension-payments/a827032

"The crucial point is that the full rate of the NSP will be not less than £151.25 if she makes voluntary contributions. Each year of contributions post 2016 adds one thirty-fifth of the NSP rate to her accumulated state pension or £4.32 per week. The key question is how much will this cost?

At current rates, a week of voluntary Class 3 contributions costs £14.10."


The above is dated before the Chancellor's November 2015 announcement that NSP 2016-17 would be £155.65 a week.

Then see below - re Class 3 NI in 2016 - 2017


https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2016-17/tax-and-tax-credit-rates-and-thresholds-for-2016-17

The rate is unchanged from 2015-16.

Presumably you would apply after April 2016 using a form as now but no announcement as yet.

http://www.thisismoney.co.uk/money/experts/article-3135965/Can-buy-extra-years-National-Insurance-new-flat-rate-state-pension.html

saver861

xylophone wrote: »

At current rates, a week of voluntary Class 3 contributions costs £14.10."
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The above is dated before the Chancellor's November 2015 announcement that NSP 2016-17 would be £155.65 a week.

Yes that is my understanding also. Effectively each additional year after April 2016 is worth £4.40 per week up to the max. So anyone with less than the max will be able to buy voluntary NIC's to make up the difference if they wish.

I'm guessing the cost will be around the same as it is now at £14 or so. If they make the cost too much more then its unlikely to be worth it to get to the breakeven point.