NEw State Pension Topping UP

Milliedog

I am new to this forum, but have been reading and researching. I am 57 and no longer work.

I have just checked my new state pension forecast which is £139.13 and it says if another four years working I could reach the maximum of £155.

It shows I have two partial years in 2006/7 and 2007/8 and could make top up payments of £689 and £437.25 respectively by 2019, as well as £722.80 and £733.20 for 2014/15 and 2015/16.

After reading some of the posts I am confused as to whether some or all of these gaps being filled will improve my state pension forecast could someone help please?

Many thanks in advance

Silvertabby

I am new to this forum, but have been reading and researching. I am 57 and no longer work.

I have just checked my new state pension forecast which is £139.13 and it says if another four years working I could reach the maximum of £155.

It shows I have two partial years in 2006/7 and 2007/8 and could make top up payments of £689 and £437.25 respectively by 2019, as well as £722.80 and £733.20 for 2014/15 and 2015/16.

After reading some of the posts I am confused as to whether some or all of these gaps being filled will improve my state pension forecast could someone help please?

Many thanks in advance

How many full years do you have, and have you ever been contracted out?

If the £139.13 you quote is your foundation amount (as at April 2016), and you have contracted out service, then it may be that topping up your pre 2016 years won't make any difference and so would be money wasted.

You can, however, pay class 3 voluntary NI contributions going forward. These currently cost £736 for each extra year, giving you an extra £4.45 per week State pension for the rest of your life.

Milliedog

silvertabby, many thanks for your prompt reply. The gov.uk site says I have 37 full years of contribution. I worked for NatWest from 1979 to 1988 and understand that I was contracted out during that period.

greenglide

So in that case paying for earlier years will make no difference to your pension and would be a complete waste of time.

Paying voluntary contributions would be the way to go and would be an excellent investment. Note that there is currently no rush to pay these.

Silvertabby

silvertabby, many thanks for your prompt reply. The gov.uk site says I have 37 full years of contribution. I worked for NatWest from 1979 to 1988 and understand that I was contracted out during that period.

Hi Millie. In that case, there's probably no benefit in plugging your pre 2016 gaps. You may find that paying 4 years post 2016 would take you over the maximum £155 per week, so you may want to just pay 3 years.

xylophone

http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html


http://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/513609/CA5603.pdf

jamesd

If you have 35 years up to 6 April 2016 do not buy any years before that because it will gain you nothing.

If you have 30-34 years up to 6 April 2016 more earlier years to get you to 35 might help you if the new rules calculation is used to get your foundation amount for 6 April 2016. DWP should be able to tell you whether yours is old rules or new rules, you get whichever one gave you the higher figure. It's also possible that older years will make your new rules calculation higher than old rules and in that case the older years might be a good buy, it depends how much will be spent to get the new rules up to the old rules level before you start to profit from it.

Years after 6 April 2016 will help those who have at least ten years and who have not yet reached the flat rate maximum, about 155 at the moment.

MikeFloutier

Many thanks Xylophone, good to see you are still King of the Links, very helpful.

I have now retired and my State Pension Age is 3/2/2019. My .gov state pension forecast says that I have 46 years of full pension contributions (although I know that some of this time was when I was with Barclays - contracted out). They also say I should make 3 years' more contributions in order to get a better pension (which would be £135pw after the top-up).

This seems a little unreasonable bearing in mind I have 46 years of contributions. I appreciate it can't be the absolute max because of the contracting out BUT SURELY 46 years doesn't need topping up. How much do you need?

Is it worth writing to them do you think?

xylophone wrote: »

http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html


http://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/513609/CA5603.pdf

xylophone

Your "starting (foundation) amount for new state pension has been calculated under the old and new systems and you start with the higher of the two.

See (although figures slightly out - for BSP read £119.30 and for NSP £155.65)
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

It would seem that your starting amount (the higher of the calculations under old and new rules) is around £122.

You can therefore buy post 5/4 /16 years before you reach SPA to improve your NSP. See previous post.

xylophone

PS

I hope that you are enjoying your retirement and the Barclays pension!

MikeFloutier

Many thanks, yes retirement is great, especially learning to sail etc in Cornwall.

Loved the link, seemed very well written although I think I may need to read it a few times to fully grasp things.

I still feel it's unfair to have to pay more than 46 years of NIC but if it seems that a few extra years of voluntary payments would be more than repaid after 3 years and thereafter be a benefit so...

I'm now wondering again about my Barclays DB step-up at SPA. Having worked so hard to get them to agree an estimated figure I'm now wondering (budgeting) if they will be trying to reduce it to the COPE figure in my state pension estimate. This would equate to around 65% of the originally agreed step-up.

Anyway I guess I'll just study things more closely in 2019.

Thanks again, your time and effort is invaluable for so many of us.