Fill NI gap years while having more than 35 years contributions?

Bumpkin_Billionaire

I am trying to understand whether I can fill gaps in my National Insurance history in order to boost my pension.

I come under the 'new' state pension system. I retired a few years ago, don't intend to work again, and my NI record shows 37 years of contributions (contracted out, of course) with an online forecast of about £125 a week in pension.

I looked at Royal London's Topping Up Your State Pension guide, and I find myself on Chart B at 'Do you have gaps you can fill from 2006/7 to 2015/16? See note 1'. Looking at Note 1, I don't fit any of the exemptions, so it seems 'You can buy back as many missing years as you wish'. Therefore on the flow chart I arrive at 'You can top up your state pension. See Note 6 on how to do this'.

Note 6 tells me 'You can top up your NI records for years from 2006/7 onwards' - again I don't fall into the exemptions mentioned. My earliest shortfall year is 2009-10.

However, I've spoken to the Future Pensions Service who tell me that one can only fill gaps in NI history if one has accrued 35 or fewer years of contributions and, because I have 37 years I can only buy future years. I can't find this mentioned on the Royal London guide, and on the gov.uk voluntary-national-insurance-contributions page it says 'You’re a man born after 5 April 1951 or a woman born after 5 April 1953 - You have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016', with no mention of the 35 years of contributions limit.

Is the advice I have received from the Future Pensions Service (that having 37 years of contributions precludes me from filling historical gaps) correct?

Thanks

molerat

Yes, FPS is correct. You can buy back as many as you wish but it will add nothing to your pension as your calculation under the new scheme would remain at (the maximum) 35/35ths - COPE or the the old 30/30ths + S2P. Buying post 2016 years is the only way to go, they will add £4.45 per year accrued. I would say you have misread / misunderstood the flow chart if you have come to the conclusion that you can top up pre 2016, you chose "new system" without fully understanding how the 2016 figure is calculated - you should have chosen "old system".

Triumph13

Yes and No. You can buy missing years, but it would be a very silly thing to do as it would have no impact whatsoever on your state pension. At April 2016 you already have a full set of years on both old and new bases and so neither calculation would be changed by buying more years.
You are, however, one of the lucky winners from the change to single tier pension as you now get the opportunity to buy further years, up to but not including the year you reach SPA, and increase your pension by £4.45 pw for each year bought.


(Molerat beat me to it!)

xylophone

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

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

Your "starting amount" has been calculated as the higher of your entitlement under old and new rules.

As you were contracted out, it is virtually certain that the old rules gives you the higher amount.

Therefore you can only increase your SP by buying post 6 4 2016 years.

Bumpkin_Billionaire

Thanks for the clarification folks. Much appreciated.

I didn't mention this in my original post so as not to complicate things, but late last year I phoned the helpline shown on the 'check your state pension forecast' web page to enquire about boosting my pension, and was told that buying previous shortfall years would increase my pension. I therefore bought a previous year and, as you have explained, this has had no effect on my projected figure. Now I've got to write to HMRC and ask for my money back!

bigadaj

Bumpkin_Billionaire wrote: »

Thanks for the clarification folks. Much appreciated.

I didn't mention this in my original post so as not to complicate things, but late last year I phoned the helpline shown on the 'check your state pension forecast' web page to enquire about boosting my pension, and was told that buying previous shortfall years would increase my pension. I therefore bought a previous year and, as you have explained, this has had no effect on my projected figure. Now I've got to write to HMRC and ask for my money back!

Good luck with that.

jerrysimon

Why would they even let people buy years pre 2016 if it makes no difference to the final pension amount ?

Surely they have a responsibility to inform people that it would make no difference ?

Jerry

molerat

I think the problem was that front end staff did not understand the implications and there was no computerised system in place that would show the effects, their screen view was the same yours - you have gaps that can be filled. Any paper based enquiry would be dealt with by back office staff that could manually calculate what is in effect something quite simple. There have been some comments here from posters who have received a refund of those misguided voluntary contributions so I don't think it will be difficult.