State pension forecast

dog_nanny

Sorry, that was meant to be a reply to minty777s post above.

Dazed_and_confused

But would a pre April 2016 year actually benefit you?

Did you pay class 2 as part of your Self Assessment bill when you completed your 2016:17 tax return?

dog_nanny

I have not completed tax returns as my total income is well below £11k a year. I earn roughly £2k a year from dog-sitting, hence I would be paying class 2 voluntarily.
I am still confused about the pre and post 2016 situation. I stopped work in 2014 and have a partial year for 2014/15. My forecast is telling me I can pay up that year, but I'm dubious about doing so with what has been said above.

Dazed_and_confused

Pre April 2016 can benefit some but not everyone so you should be certain of the benefit before paying for older years.

Don't know how class 2 works if not registered self employed as such as that situation isn't covered here,

https://www.gov.uk/pay-class-2-national-insurance

dog_nanny

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

I'm confused by this guide. On P.3 it says "work out whether you are under the old or new system." I was born in 1955 so I'm under the new system. It tells me to go to chart B on P.6.
Then the very first question on Chart B is "Is your starting amount based on the old or new system?"
But it's just told me I'm on the new system so "go to Chart B."
Could somebody please have a look at the guide and tell me what I'm missing?
Elaine.

p00hsticks

erbriggs wrote: »

Could somebody please have a look at the guide and tell me what I'm missing?
Elaine.

You can be in the new system (i.e. reach State Retirement Age (SPA) after 6/4/2016) but still have a starting amount based on the old system rules.

At 6th April 2016, a 'starting amount' was calculated for all people under SPA based on their accumulated record so far.

This amount was whichever was the higher of the two amounts worked out under the old and new systems.

Old system;
(pre-2016 NI years up to maximum of 30) / 30 x £119.65 + any additional pension (SERPS and/or S2P)

New system;
(pre- 2016 NI years up to maximum of 35) / 35 x £155.35 - COPE

(Note - I may have the £ figures slightly wrong - they represent the basic state pension under old rules / maximum state pension under new rules as at 6th April 2016 - the amounts have subsequently increased)

If you have a high COPE figure (an adjustment applied to people who were previously contracted out into a private pension scheme and so payed a lower rate of NI) then it's likely that your starting amount is based on the old system.

Buying pre-2016 years may or may not affect your starting amount.
Once your starting amount has been calculated, it's simply the case that each post-2016 NI year adds 1/35th of the new State Pension amount until the maximum weekly amount is reached or SPA is reached.

molerat

erbriggs wrote: »

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

I'm confused by this guide. On P.3 it says "work out whether you are under the old or new system." I was born in 1955 so I'm under the new system. It tells me to go to chart B on P.6.
Then the very first question on Chart B is "Is your starting amount based on the old or new system?"
But it's just told me I'm on the new system so "go to Chart B."
Could somebody please have a look at the guide and tell me what I'm missing?
Elaine.

How many pre 2016 years have you got ? Does your forecast show a COPE amount ? As a rule of thumb if less than 30 then pre 2016 contributions will add value, if between 30 and 34 then pre 2016 contributions may add value, if 35 or more pre 2016 contributions will not add value.

dog_nanny

Thank you Poohsticks and Molerat.
My forecast says I have 42 full years, 4 years left to contribute and 4 years when I did not contribute enough. My COPE figure is £19.78 p.w.

The four years I did not contribute enough were 2012/13, 2014/15, 2015/16 and 2016/17. So it seems that it would not benefit me to pay up the first 3 of those years. Despite this, the forecast is telling me how much I need to pay to top up each of those years!

This is really bad practice by DWP and I can foresee many more people getting caught out by this.

Elaine

xylophone

http://www.thisismoney.co.uk/money/pensions/article-5037229/Savers-snared-state-pension-trap.html

newatc

We are in the process of filling gaps in my wife's NHI contribution years. My wife was born in 1954 and the intention is use the gaps from 2006 onwards (where the gap is small because she worked part time). Just got off the phone with the DWP where the lady insisted we could back 6 years. Checked the great Royal London document and that said we could go back to 2006 and then checked the gov. uk which said "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".

We are getting new Pension Forecast and then taking it on from there but it does seem the DWP lady was advising incorrectly underlining the need to always double check what you are being told.