New State Pension Guide

XRAT

According to her 'D. for W&P' forecast my wife has 31 full years contributions to her state pension but needs 35 for the full basic state pension (She has no intention of working again) so she is 4 years contributions short of a full basic state pension.
She can claim aged 67 (in 2030.)
Why then does the D of W&P site state she can make 6 years contributions?
Can we assume this is because whilst the current requirement is for 35 years, it is intended to put this up to 37 and D of W&P don't want to have to change the wording on their software??

molerat

35 years is not relevant to those with a pre 2016 history. In 2016 she was awarded a sum relevant to her history and she will only get the full amount by filling the required number of years, at today's value of £4.82 per year, to bridge that difference. If she needs more than 4 years on top of her current 31 to fill the gap then it is likely she was previously in a contracted out pension scheme. The pension forecast will give all the numbers and it will mention contracting out and show a COPE amount in a click link. I have 42 years and still do not get the full amount.

p00hsticks

I can't get my forecast up at present but my recollection is that your forecast tells you;
* how many full years you have so far ,
* how many years here you haven't contributed enough
* how many more years you need to reach the maximum pension and
* how many more years more are available for you to contribute (i.e. between now and the year prior to you reaching state pension age)

As molerat says, if your working life started prior to the intorduction of the new state pension, transitional ruels will apply and you may need more or less than 35 years to reach the maximum possible amount depending on your personal circumstances.

This is a good guide for explaining about how voluntarily topping up your record may be beneficial
https://www.royallondon.com/media/good-with-your-money-guides/topping-up-your-state-pension/

Tassie_Devil

XRAT wrote: »

According to her 'D. for W&P' forecast my wife has 31 full years contributions to her state pension but needs 35 for the full basic state pension (She has no intention of working again) so she is 4 years contributions short of a full basic state pension.
She can claim aged 67 (in 2030.)
Why then does the D of W&P site state she can make 6 years contributions?
Can we assume this is because whilst the current requirement is for 35 years, it is intended to put this up to 37 and D of W&P don't want to have to change the wording on their software??

She should call future pensions and ask them which years it is worth her paying for. I found out when I called that it is possible to contribute for unnecessary years.


https://www.gov.uk/future-pension-centre

colsten

XRAT wrote: »

According to her 'D. for W&P' forecast my wife has 31 full years contributions to her state pension but needs 35 for the full basic state pension (She has no intention of working again) so she is 4 years contributions short of a full basic state pension.
She can claim aged 67 (in 2030.)
Why then does the D of W&P site state she can make 6 years contributions?
Can we assume this is because whilst the current requirement is for 35 years, it is intended to put this up to 37 and D of W&P don't want to have to change the wording on their software??

A word about terminology. "Basic pension" only applies to people who reached state pension age before 6/4/16, and a tiny number of exceptional cases after that date. Most people with a state pension age from 6/4/16 onwards will be on the new state pension (nSP) only. With a state pension age in 2030, your wife is almost certainly in the latter category. After about 2025, everyone with at least 35 full NI years should receive the max nSP. Before then, contracted-out years could reduce the amount of nSP.

As a very rough guide, your wife can subtract her forecasted amount from £168.40, then divide the result by £4.82. The resulting number, rounded down to the nearest full number, will be the number of full NI years she would need to get the max nSP. The guide p00hsticks mentions goes into further detail about this.

loiner

I reached state pension age shortly after April 2016. As I continued to work I deferred my state pension but I now wish to take it. I've spoken to the government Pension Service on 2 occasions for payment predictions and on both occasions I was told I had the option of taking 1 year's payment back dated as a lump sum. However, their website says the lump sum option is only available to those reaching retirement age before April 2016. Who is correct?

p00hsticks

loiner wrote: »

I reached state pension age shortly after April 2016. As I continued to work I deferred my state pension but I now wish to take it. I've spoken to the government Pension Service on 2 occasions for payment predictions and on both occasions I was told I had the option of taking 1 year's payment back dated as a lump sum. However, their website says the lump sum option is only available to those reaching retirement age before April 2016. Who is correct?

I agree with you - the option of a lump sum after deferment is only available if you reached state pension age under the old rules (i.e. prior to 6th April 2016)

loiner

p00hsticks wrote: »

I agree with you - the option of a lump sum after deferment is only available if you reached state pension age under the old rules (i.e. prior to 6th April 2016)

It's diabolical that I've been given the wrong information by 2 members of staff. They've even told me the value of the lump sum I am due. I've delayed taking the lump sum and pension due to tax reasons but now I discover I could've started taking my pension much earlier. Grrrrrrr!

Dazed_and_confused

They haven't given you incorrect information though.

You are still able to get a lump sum. The fact that you reached State Pension age doesn't after 5 April 2016 doesn't alter this.

You are getting confused between deferring and backdating.

Backdate your claim by 12 months and you will get a lump sum

This may not be what you want to do or what is financially best but it is possible.

Google Age Concerns State Pension guide.

xylophone

See

https://www.taxadvisermagazine.com/article/lump-sums
This article started off by saying that you cannot get a lump sum payment by deferring a claim to the new state pension (those reaching state pension age from 6 April 2016) – you can only get a higher regular pension. While that is true, you could end up with a lump sum from claiming the new state pension if you backdate your claim.

You can backdate a claim to the new state pension for up to 12 months. A backdated payment does not earn interest and is simply a payment of the amount you would have received, going back to the date of the claim. It does not qualify for any ‘special’ tax rules as with the old deferred state pension lump sums described above. Under Part 9, Chapter 5 ITEPA 2003, it therefore follows that the pension income is the amount accruing, irrespective of when it is paid.

A prospective claimant of the new state pension cannot therefore delay a claim to it, obtain a lump sum under the backdating rules and then expect that lump sum to be taxed in a later year. Though of course they may defer a claim to the pension and any higher weekly amount due when eventually claimed would be taxable in the year of claim onwards.