State Pension for me - confused - help please

molerat

Yes. You cannot buy the year you reach SPA. Buying them together will not be a problem.

roxy28

molerat wrote: »

Yes. You cannot buy the year you reach SPA. Buying them together will not be a problem.

Ok thanks for the reply.

My uncle who this applies to was unsure if the tax year 2017/18 was ok to buy.

Also is there any advantage in buying 2016/17 after april 6th this year

molerat

The advantage is in buying them as late as possible. The earliest,16/17, will stay at the same price so the money can be put away in an interest earning account plus it is safe if he falls under a bus

roxy28

molerat wrote: »

The advantage is in buying them as late as possible. The earliest,16/17, will stay at the same price so the money can be put away in an interest earning account plus it is safe if he falls under a bus

Ok thanks again, have passed info on.

happyhero

I had to resurrect my post from a few weeks back as I was amazed with some new info I found and felt it was relevant to my case.



Basically I got my wife’s State Pension forecast and although she is only a few months different in age to me and has only ever done part time work between 4 pregnancies and periods of not working except for when she left school and did a couple of years working for British Home stores, she seems to have accumulated enough contributions to be nearly on the new maximum of £155 with a figure of £151.


How is this possible, I worked for 30 years solid achieving a £119 weekly figure and I’m 9 years short to make the new £155 figure, and she has a messy mostly part time past which already gives her £151 per week and only 2 years required to make £155?



Lovely if we can both make our SP’s up to max without too much cost but I’m almost scared to ask about hers in case it’s a mistake.


Here’s her SP forecast


[FONT=&quot]Your State Pension [/FONT]
[FONT=&quot]You can get your State Pension on 30 August 2028. Your forecast is [/FONT]
[FONT=&quot]£155.65 a week[/FONT][FONT=&quot][/FONT]
[FONT=&quot]£676.80 a month, £8,121.59 a year [/FONT]
[FONT=&quot]Your forecast[/FONT]

• [FONT=&quot]is not a guarantee and is based on the current law[/FONT]
• [FONT=&quot]does not include any increase due to inflation[/FONT]

[FONT=&quot]You need to continue to contribute National Insurance to reach your forecast[/FONT]
[FONT=&quot]Estimate based on your National Insurance record up to 5 April 2016 [/FONT]

• [FONT=&quot]£151.20 a week [/FONT]

[FONT=&quot]Forecast if you contribute another 2 years before 5 April 2028 [/FONT]

• [FONT=&quot]£155.65 a week [/FONT]

[FONT=&quot]£155.65 is the most you can get[/FONT]
[FONT=&quot]You cannot improve your forecast any further, unless you choose to put off claiming.[/FONT]
[FONT=&quot]If you’re working you may still need to pay National Insurance contributions until 30 August 2028 as they fund other state benefits and the NHS.[/FONT]
[FONT=&quot]View your National Insurance record[/FONT][FONT=&quot] [/FONT]
[FONT=&quot]How contracting out affects your pension income[/FONT]
[FONT=&quot]Like most people, you were contracted out of part of the State Pension.[/FONT]
[FONT=&quot]More about how contracting out has affected your pension income.[/FONT]
[FONT=&quot]Putting off claiming[/FONT]
[FONT=&quot]When you are 67, you can put off claiming your State Pension. Doing this may mean you get extra State Pension when you do come to claim it. The extra amount, along with your State Pension, forms part of your taxable income.[/FONT]

[FONT=&quot]You were contracted out [/FONT]
[FONT=&quot]In the past you’ve been part of one or more contracted out pension schemes, such as workplace or personal pension schemes.[/FONT]
[FONT=&quot]When you were contracted out:[/FONT]

• [FONT=&quot]you and your employers paid lower rate National Insurance contributions; or[/FONT]
• [FONT=&quot]some of your National Insurance contributions were paid into your private pension schemes instead[/FONT]

[FONT=&quot]Contracted Out Pension Equivalent (COPE)[/FONT]
[FONT=&quot]Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.[/FONT]
[FONT=&quot]The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.[/FONT]
[FONT=&quot]Your COPE estimate is £4.45 a week. [/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]How is this possible?[/FONT]

LHW99

If your wife was claiming child benefit, then she could have been given a number of years credits towards State Pension.
Also you can pay NI contributions as long as you earn over a certain lower limit, and these still count towards the total number of years.

molerat

She has at least 35 years contributions, the NI record will show how they were obtained. The big difference between the two of you is that she has not got the occupational pension which you paid lower NI for. Her COPE amount is only £4.45 whereas yours is [FONT=&quot][FONT=&quot][FONT=&quot]£85.27 so you get the old 30 year pension as it is higher and she gets the new.
[/FONT][/FONT][/FONT]

xylophone

For each of you two calculations will have been done at 6.4.2016.

The starting amount for each of you will have been the higher of the two.

Calc 1 Old Rules

Full BSP for 30 years NI ( for your wife, this could have included credits while she was in receipt of CB)

plus (any SERPS/S2P minus a deduction for contracting out).

Calc 2 New Rules

Full NSP - COPE.

The New Rules second calculation for you would have given £155.65 - £85.27 = £70.38.

Clearly the calculation under the old rules gave you the higher starting amount.

The second calculation for your wife would have been £155.65 - £4.45 =

£151.20.

It seems likely that the New Rules calculation was the higher of the two in your wife's case.

happyhero

Thanks guys for the responses, so it seems having kids gave us money instead of what usually happens where they bleed us dry:rotfl:

What actually happened was my wife was married before we got together and she had 2 kids then and then again with me another 2 (so total ages now are 32, 30, 17 and 11) so this has kept child benefit coming in for a long time.

I picked up all kids in the end (first 2 were only 5 and 7 when I came along) but I wont tell them our good news or they'll expect a rise from us:rotfl:

I'm surprised what an effect having kids can have on this. Makes me think of what my wife's sister said. She lives in France and made it sound like they encourage you to have children in France, you practically get paid for having kids, not sure of the details and how accurate it is but thats what she told us.

So one last question will it be the same per year roughly to buy the 2 years for my wife, I think it was around £700 per year mentioned earlier in this thread?...................................................................................... Actually will she even have to buy 2 more years as she will still be getting child benefit for a while longer what with our youngest being only 11 so i assume that will complete her record to get the maximum of £155???

xylophone

https://www.gov.uk/child-benefit/what-youll-get


Child Benefit and your State Pension
If your child is under 12 and you’re not working or don’t earn enough to pay National Insurance contributions, Child Benefit can help you qualify for National Insurance credits.