40 Years of NI contributions = £119.35 :(

jerrysimon

Ok just checked on line and I have 40 years of contributions but will only get £119.35/w

Ok I do have 40 years in a DB pension and was opted out so I know I am still very fortunate

I am now 56 and my full yearly contributions go back to 1976/77 when I started work!

Now that opting out has stopped and my NI contributions have increeased, it says I can get £155.65 if I work another 9 years (49 years contributions sigh..) and would draw pension in 10 years time at 66.5 years.

Anyway I plan to leave work next March 2017 at 56.5 so 10 years before I draw SP. Someone on here said once I stop work I could top up each year £700 ish/year even though I will have stopped paying NI, however I dont think I will be able because I already have over 35 years of contributions ?

I will be paying tax on my pension.

Jerry

hugheskevi

I do have a DB pension and was opted out so I know I am still very fortunate.

You were contracted-out, not opted-out, they mean different things.

I have 40 years of contributions but will only get £119.35/w...Anyway I plan to leave work next March 2017 at 56.5 years so 10 years before I draw SP. Someone on here said I could top up each year £700 ish/year however if I give up work and stop paying NI and because I already have 40 years I dont think I will be able to do this ?

So you have a starting foundation entitlement under the new single-tier pension of £119.35 p/w and 2016/17 will be an additional qualifying year, taking your pension to about £123.80 p/w. Each future qualifying year will increase this by £4.45p/w, up to a maximum of £155.65 (these figures will increase a bit in future as amounts are indexed each year).

You can make Voluntary Class 3 contributions if you wish to make future years qualifying years, link here to read more about them - https://www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions

jerrysimon

Thanks I meant contracted out sorry lol.

The question was can I make additional contributions once I stop working, draw my DB pension and stop paying NI. Some one told me I cant do that because I already have 35 years contracted out ?

I will read the link.

Hmm its complicated. Looking at this I am not sure I can.

https://www.gov.uk/voluntary-national-insurance-contributions/top-up-your-state-pension

Guess I should phone and find out.

Jerry

hugheskevi

The question was can I make additional contributions once I stop working, draw my DB pension and stop paying NI. Some one told me I cant do that because I already have 35 years contracted out ?

Yes, you can. Although technically as Class 3 contributions are National Insurance contributions you would be paying National Insurance, but that is semantics.

What you cannot do is pay extra now, as you will not have any previous years which are non-qualifying years. You can only make the Class 3 payments in future, in respect of years which are non-qualifying.

molerat

You are double fortunate. A DB pension and the ability to make up your SP amount for a bargain price. Go fill yer boots If we had stayed with the old system you would have the £119 and no ability to improve it.

jerrysimon

molerat wrote: »

You are double fortunate. A DB pension and the ability to make up your SP amount for a bargain price. Go fill yer boots If we had stayed with the old system you would have the £119 and no ability to improve it.

Indeed thanks guys!

Jerry

hugheskevi

Hmm its complicated. Looking at this I am not sure I can.

[URL="Hmm its complicated. Looking at this I am not sure I can. https://www.gov.uk/voluntary-national-insurance-contributions/top-up-your-state-pension Guess I should phone and find out."]https://www.gov.uk/voluntary-national-insurance-contributions/top-up-your-state-pension[/URL]

Guess I should phone and find out.

This link is about something completely different to voluntary class 3 contributions. The link is about existing pensioners being able to pay a lump sum in return for a permanent increase to their State Pension, of up to £25 p/w.

You will see one of the things on the page is:

If you were born after this I]6 April 1951[/I, you may be able to make voluntary contributions instead.

The voluntary contributions this refers to are Class 3 contributions.

Gers

This is what I have done - I've got 46 full years NI contributions although I was contracted out too. I opted to retire 18 months ago, long before SP date and now work very part part time.

I phoned HMRC (easier than in previous years) and got a very helpful person who advised about paying voluntary class 3 contributions. I only have to pay for missing years in 2015 / 2016 and 2016 /2017 to make up to full SP. They sent me a payment slip and I did a bank transfer for 2015 / 2016 - took no time and will have great benefit. I will do the same at the start of the tax year 2017 / 2018, after which I'll be paid up!

The advice to explore this came from people on this board with much more knowledge of pensions than me, they are worth listening to.

frank777

Gers 2015/2016 doesn't count for any extra State Pension - a waste of money in your case - 2016/17 will count - molerat will confirm what I say!

I'm due to retire next year and I am gathering information too from the good people on this board.

HMRC staff don't have a clue, I believe you have 90 days to ask for a refund for 2015/2016, if your lucky!

Gers

frank777 wrote: »

Gers 2015/2016 doesn't count for any extra State Pension - a waste of money in your case - 2016/17 will count - molerat will confirm what I say!

I'm due to retire next year and I am gathering information too from the good people on this board.

HMRC staff don't have a clue, I believe you have 90 days to ask for a refund for 2015/2016, if your lucky!

I only had 17 weeks missing - I'll triple check on Monday!

frank777

Gers - did you just ask, if you could pay for the missing 17 weeks NI for the year 2015/2016 or ask for advice on making up missing weeks - how it would affect your State Pension.

I might have misjudged the HMRC staff :mad:
Appears they may have just been collecting a little extra revenue for the government at your expense, it's not a crime