New State Pension Guide

Medosh

Can I ask on behalf of my partner, reaching state retirement age (66) in May 2021, who has been early retired with contracted out occupational pension since 2015 and 36 years NI contributions. Can she enhance her State pension upwards towards the £155 figure by 'signing on' so as to get NI Class 3 stamp paid, as one earlier poster appeared to imply was possible. Or can she build by buying contributions Post April 2016 until April 2021? Thanks

molerat

She can increase her post April 2016 NI status by many means - employment, self employment, signing on whether receiving benefit or not, class 3 voluntary contributions, looking after grand children and through a range of other benefits.

itsanne

Sorry if this has already been covered, but my head is now spinning.

Like many others, having checked my NI years I thought I was covered for the full pension, but I've now had the online pension forecast:

Estimate based on your National Insurance record up to 5 April 2016

• £125.23 a week

Forecast if you continue to contribute until 5 April 2020

• £143.02 a week

£143.02 is the most you can get


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

38 years full contributions



COPE estimate £60.44 per week

I'm 61 and took early retirement at 55. I had no gaps in NI contributions until retiring. Would I be better to pay Class 3 contributions from the 2016-17 tax year onwards, buy previous years or a mixture of the two to reach the higher amount?


Thanks

molerat

The April 2016 figure is the higher of the old or new calculations. You have 38 years of contributions and the maximum you can use pre 2016 is 30 or 35 depending on which calculation is used. Based on your COPE your pension amount is under the old system. You cannot add anything purchasing pre 2016 years. Post 2016 years will gain you £4.45 for each year purchased so 4 years at around £733 each, just under £3K, will gain you the £17.08 to make up to £143.02. Something well worth doing.

itsanne

Thank you very much, molerat. That clarifies things - I knew when I was looking at it that I'd missed something.

Now I just need to be sure to live for seven years to break even .....

molerat

You have until April 2019 to pay for 16-17 at the current rate so hold on to your cash for a while just in case

1957sisgb

Im a bit confused over the "qualifying years". Ive been onto the HMRC website which says i have 41 qualifying years, but then goes on to say that last year wasn't a qualifying year as I paid very little N.I and suggests I make a voluntary contribution to make up the shortfall. I'm wondering why this would be sensible if I already have enough qualifying years, and given that additional qualifying years don't return any additional pension? Anyone able to shed any light on this quandary please? id be most grateful1

GunJack

1957sisgb wrote: »

Im a bit confused over the "qualifying years". Ive been onto the HMRC website which says i have 41 qualifying years, but then goes on to say that last year wasn't a qualifying year as I paid very little N.I and suggests I make a voluntary contribution to make up the shortfall. I'm wondering why this would be sensible if I already have enough qualifying years, and given that additional qualifying years don't return any additional pension? Anyone able to shed any light on this quandary please? id be most grateful1

it depends, what is your current estimate and when's your SP date?

p00hsticks

1957sisgb wrote: »

I'm wondering why this would be sensible if I already have enough qualifying years, and given that additional qualifying years don't return any additional pension? Anyone able to shed any light on this quandary please? id be most grateful1

It's not as simple as just the number of years in this transition period - if you don't already have an up to date pension forecast you need to get one.

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

If the current figure quoted is less than £155.65, then, as molerat says, come back here with the details and people can tell you if making up any extra years has any benefit.

1957sisgb

Ahh. The govt site says it can't provide the forecast yet- I have to request one in the post. A previous one ( before last year which was the unqualifying year) said that it would be less than the £155 because of previous contracting out. From memory I think it was about £132. State retirement date is 2023, although Im not likely to earn enough to add any more qualifying years between now and then, unless I make the voluntary contributions.