NI contributions and the State Pension

ZT_Owner

I am currently 57½ and took redundancy two years ago. Up until that point, I had been paying NU contributions every year since 1975. I have had some small jobs since but the number of hours I have worked has been to low to generate any further NI contributions.

On checking the GOV.UK - Check your State Pension web page, I’m told that:
- Estimate based on your National Insurance record up to 5 April 2015 is £139.65 a week
- Estimate if you contribute another 5 years before April 2024 is £155.65 a week

Along the way, I have been part of one or more contracted out pension schemes. The GOV.UK site tells me that my Contracted Out Pension Equivalent (COPE) estimate is £97.91 a week.
So my questions are:
- Assuming I make no more NI contributions, will I get 139.65 per week?
- The COPE amount of 97.91 – how will that affect this figure of 139.65?

Moving on then...
I am considering self-employment.

Again looking at the GOV.UK website, I see that:
You usually pay 2 types of National Insurance if you’re self-employed:
- Class 2 if your profits are £5,965 or more a year
- Class 4 if your profits are £8,060 or more a year

If I manage to make a profit and pay Class 2 contributions, at the rate of 2.80 per week, will this increase the above state pensions figure(s)?

Many thanks

HappyMJ

Pay class 2 for 12 months and you get another year of NI contributions.

Class 4 makes no difference it's just another tax.

Pincher

Don't get carried away. There is a point beyond which you are just paying IN, and get nothing more out.

molerat

ZT_Owner wrote: »

I am currently 57½ and took redundancy two years ago. Up until that point, I had been paying NU contributions every year since 1975. I have had some small jobs since but the number of hours I have worked has been to low to generate any further NI contributions.

On checking the GOV.UK - Check your State Pension web page, I’m told that:
- Estimate based on your National Insurance record up to 5 April 2015 is £139.65 a week
- Estimate if you contribute another 5 years before April 2024 is £155.65 a week

Along the way, I have been part of one or more contracted out pension schemes. The GOV.UK site tells me that my Contracted Out Pension Equivalent (COPE) estimate is £97.91 a week.
So my questions are:
- Assuming I make no more NI contributions, will I get 139.65 per week? Yes
- The COPE amount of 97.91 – how will that affect this figure of 139.65? It has no effect, it is already factored into the calculation of the starting amount.

Moving on then...
I am considering self-employment.

Again looking at the GOV.UK website, I see that:
You usually pay 2 types of National Insurance if you’re self-employed:
- Class 2 if your profits are £5,965 or more a year
- Class 4 if your profits are £8,060 or more a year

If I manage to make a profit and pay Class 2 contributions, at the rate of 2.80 per week, will this increase the above state pensions figure(s)? Yes, a full year of class 2 will give you another £4.45 of state pension until you reach the maximum £155.65.

Many thanks

You have quite a few years yet to make a decision as to the best way to make up the full pension shortfall.

ZT_Owner

Thanks for the prompt replies. Now to get self-employment underway then!

GunJack

Just bear in mind you'll only need another 4 years NI to make max SP......