New State Pension Guide

Froglet

p00hsticks wrote: »

It would be £3.98 (it is worked out by dividing the £119.30 full 'basic' pension amount under the old rules by the 30 years required to obtain that full pension under the old rules).

Although you say that it was beneficial for you, it is not always the case to buy these additional pre-2016 years - it is unlikely to be worth it for those still to retire who have more than 30 years NI already.

It is beneficial for me as I only have 16 years worth of full contributions.I can make another 8 before I retire next summer.Some of the missing years already have part contributions so it is costing me approx 4.5 k ,and as I hope to live at least another 20 years,is more than worth it as,even with a small private pension,I will not be paying tax.

Johnkst

molerat wrote: »

Surely a year is a year irrespective of which side of 2016 it belongs to or is purchased. The value is only relevant according to whether the "old" or "new" system is used when calculating the 2016 starting amount which will be recalculated if gaps are filled.

Apparently not, Molerat. Don't ask me why that is, though... I think the 'old' system only pays more if you've pretty much already paid up in full already. Anyone, like me, who is short of 'full contributions' (I contracted out years ago!) is going to be better off under the new rules.

molerat wrote: »

Why are you limited to paying back to only 2010, are all 2006 to 2010 years filled ?

Yes. End of 2010 was the last time I actually worked. I don't 'sign on' so I don't get my NI contributions paid for me so that is why I'm missing the subsequent years.

molerat

Johnkst wrote: »

Apparently not, Molerat. Don't ask me why that is, though... I think the 'old' system only pays more if you've pretty much already paid up in full already. Anyone, like me, who is short of 'full contributions' (I contracted out years ago!) is going to be better off under the new rules.



Yes. End of 2010 was the last time I actually worked. I don't 'sign on' so I don't get my NI contributions paid for me so that is why I'm missing the subsequent years.

OK, so as you were contracted out your starting amount may be currently calculated under the "old" rules so a year is worth the lower amount. Have you done the calculations under both methods ? Have you got your COPE figure ? With a low amount of years currently held more pre 2016 purchases may swing how the figure is calculated. I don't think that any official source is fully up to speed on all the "what if" scenarios, I believe that a system is due this autumn.

Johnkst

molerat wrote: »

OK, so as you were contracted out your starting amount may be currently calculated under the "old" rules so a year is worth the lower amount. Have you done the calculations under both methods ? Have you got your COPE figure ? With a low amount of years currently held more pre 2016 purchases may swing how the figure is calculated. I don't think that any official source is fully up to speed on all the "what if" scenarios, I believe that a system is due this autumn.

All the 'what if' calculations I have, I got off the government site yesterday. I didn't check the COPE figure, but I did see it offered. The system was marked as 'Beta', so maybe this already is the 'new' version promised for the Autumn...?

molerat

Does it mention the purchase of pre 2016 years specifically ? Mine certainly does not and I have no contributions since 2009. It purely states I have £X and can increase it to £Y with Z years contributions. It also states in the NI record that I can make up the shortfall but does not state what effect this will have on my pension when I know that paying for pre 2016 contributions will add nothing.

Johnkst

molerat wrote: »

Does it mention the purchase of pre 2016 years specifically ? Mine certainly does not and I have no contributions since 2009. It purely states I have £X and can increase it to £Y with Z years contributions. It also states in the NI record that I can make up the shortfall but does not state what effect this will have on my pension when I know that paying for pre 2016 contributions will add nothing.

Yes. It says:

Breakdown
Estimate based on your National Insurance record up to 5 April 2015 £85.46 a week

Forecast if you continue to contribute until 5 April 2020 £109 a week

You can improve your forecast
You have years on your National Insurance record where you did not contribute enough.
- filling years can improve your forecast
- you only need to fill 5 years to get the most you can

The most you can get by filling any 5 years in your record is £128.88 a week

Like most people, you were contracted out of part of the State Pension.

p00hsticks

molerat wrote: »

Surely a year is a year irrespective of which side of 2016 it belongs to or is purchased. The value is only relevant according to whether the "old" or "new" system is used when calculating the 2016 starting amount which will be recalculated if gaps are filled.

As I understand it, pre-2016 years will be used to calculate the 'starting amount' (using both old and new rules) while post 2016 years will then build on that starting amount going forward.

Buying pre-2016 years would therefore only be beneficial if either a) your starting amount is based on the old rules and you have less than 30 years or b) your starting amount is based on the new rules and you have less than 35 years.

Buying post 2016 years will only be of benefit if your maximum starting amount is less than £155.65

p00hsticks

Johnkst wrote: »

Yes. It says:

Breakdown
Estimate based on your National Insurance record up to 5 April 2015 £85.46 a week

Forecast if you continue to contribute until 5 April 2020 £109 a week

You can improve your forecast
You have years on your National Insurance record where you did not contribute enough.
- filling years can improve your forecast
- you only need to fill 5 years to get the most you can

The most you can get by filling any 5 years in your record is £128.88 a week

Like most people, you were contracted out of part of the State Pension.

Does it say how many full NI years you have ?
And does it give a cOPE figure ?

molerat

Exact calculations will be muddied as the NI is only up until April 2015 so there will be the £3 - £4 2015-16 assumed figure in there. All will be clearer next month (hopefully).

bigfreddiel

Johnkst wrote: »

End of 2010 was the last time I actually worked. I don't 'sign on' so I don't get my NI contributions paid for me so that is why I'm missing the subsequent years.

This is an important point. If you are looking for work, been made redundant maybe you SHOULD sign on because your NI stamp gets 'paid', and you don't end up with any missing weeks.

Especially if you have been made redundant, because you can sign on straight away.

I know this because it's happened to me twice in my career, albeit in the 1990's, so it may be different now.

So don't be too proud to sign on. Good luck fj