State Pension query

Mojisola

bigfreddiel wrote: »

Wrong -you need 35 years of NI contributions.

You're right - they've changed it to 35 for the new pension.

p00hsticks

Mojisola wrote: »

You will need 30 years of contributions to get the full amount of the new pension.

35 actually (its 30 at the moment, but rises to 35 with the new State Pension). Although during the transitional period, it's possible ot get the 'full amount' with less or 'not the full amount' with more (see below)

50Twuncle wrote: »

I have 27 years + an extra 3 years (which, I discovered that I had been credited with from age 16 for some reason)

Up until 2010, everyone was credited with 3 NI years to cover the ages 16-18. This was to ensure that those who chose to remain in education after the age of 16 could still qualify for a full pension at the end of their lives, in an era where a record of 44 years (for men) or 39 years (for women) was required. The credits were dropped in 2010 at the same time as the requirement for a full basic pension was reduced to 30 years.

Under the current rules, your 30 years is enough to qualify you for the full basic rate pension of £115.95. If you have been 'contracted in' to SERPS or S2P at any point you might get more.

Under the new rules, your 30 years will get you 30/35ths of the new maximum rate of £155.65, with some (possibly quite large) deductions if you have been 'contracted out'

As at April 6th 2016, DWP will calculate everyones entitlement under both the old and new rules and the higher of the two amounts will form peoples starting amounts. If this starting amount is greater than £155.65, then people will get the higher amount, but will have no opportunity to increase it further.

If it less than the £155.65 maximum, then every additional NI year beyond 6/4/16 that people work (or buy) up to their retirement age will add 1/35th of £155.65 (around £4.45) to their pension amount, up to the maximum of £155.65.

To find out where you stand, you need to get a personalised pension statement
https://www.gov.uk/check-state-pension

woolly_wombat

50Twuncle wrote: »

I now work for minimum pay and don't earn enough to pay NI - So that is it - I am 52 years old !!

If you earn at least the Lower Earnings Limit (LEL) for any one employer then, as the following link explains, "Employees don’t pay NI but get the benefits of paying":
https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

The LEL is currently £5824 pa, so you'll get NI credits if you earn at least that much.

lovinituk

If you don't have a full year, do you lose that whole year? So for example if you only pay for 17 weeks for a year, do you lose those 17 weeks worth of credits? Or do they accumulate with any other part years?

Alter_ego

lovinituk wrote: »

If you don't have a full year, do you lose that whole year? So for example if you only pay for 17 weeks for a year, do you lose those 17 weeks worth of credits? Or do they accumulate with any other part years?

You lose them- sorry

lovinituk

Alter_ego wrote: »

You lose them- sorry

That's rubbish! I've got 2 part years that don't count then. I need to double check they've got those years right.

woolly_wombat

lovinituk wrote: »

If you don't have a full year, do you lose that whole year? So for example if you only pay for 17 weeks for a year, do you lose those 17 weeks worth of credits? Or do they accumulate with any other part years?

As long as your earn at least as much as the Lower Earnings Limit for that particular year, for any one employer, then you will be treated as if you have paid NI for that year.

The LEL for 2015/2016 is £5824 pa.

lovinituk

woolly_wombat wrote: »

As long as your earn at least as much as the Lower Earnings Limit for that particular year, for any one employer, then you will be treated as if you have paid NI for that year.

The LEL for 2015/2016 is £4824 pa.

One of the years was way back in 92/93 - that's going to be fun to try and work out!

The other year was when I transitioned from a sole trader to a Limited Company and for a while I don't think I paid myself from the Ltd so they are probably correct there.

woolly_wombat

lovinituk wrote: »

One of the years was way back in 92/93 - that's going to be fun to try and work out!

The LEL for 92/93 was £2808 pa according to this link:

http://adviser.royallondon.com/pensions/technical-central/rates-and-factors/ni-limits/lower-and-upper-earnings-limits/

bigfreddiel

Alter_ego wrote: »

Sorry to disillusion you, you will get an entirely different figure as your pension will be calculated using your history under the old system or some calculation that's a mystery to me. Anyway you get the greater of the 2. The one thing you are most unlikely to get is £155.77.
Try getting a pension forecast which will help to explain things.

That figure is from the forecast and is the bigger of the two, old and new calculations.

And you're correct the calculation is a mystery now. It didn't used to be.

Cheers fj