Pension Forecast

NE5

Hello....I've just been on the Government Gateway and had a pension forecast and it says I am 3 years short, and I have 6 incomplete years.

Does this mean I can pay any 3 of these years and as I've done 41 qualified years, isn't 44 years an odd number to qualify ???

Also how does COPE affect this ?

Thank you.

Silvertabby

Don't pay any pre 2016 years - they won't make any difference.

If you work/pay NI for another 3 years then you should be ok. Ignore the COPE - it's already been accounted for.

molerat

At April 2016, when the calculation of your starting amount was made, years became irrelevant and the £s figure from the calculation became the only thing of importance going forward. The COPE amount was used in that calculation only. If you have in excess of 35 pre 2016 years then making up any those pre 2016 incomplete years will add no benefit to your pension. You need to add post 2016 years to count. If you want to post up all the figures here and you will be pointed in the right direction.

NE5

I have 41 years of contributions. I am 63. I am 3 years short (44 years seems a bit odd ?)

These years are as follows.

2016-17 pay £589.10 by 5 April 2023 (I will be 68 by then ???)

2015-16 pay 423 by 5 April 2023

2014-15 pay £472.60 by 5 April 2023

2012-13 pay 64.08 by 5 April 2023

2011-12 pay 340.23 by 5 April 2023

I also had a shortfall in 1975-76 when I was young but that is not relevant now.

These amounts may increase after 5 April 2019.

The current year is not available yet.

My forecast currently is £135.14 a week.

Forecast if I contribute until 5 April 2020 is £148.82 a week

Maximum possible is £153.38 a week.

I am now retired in receipt of a Govt pension but I have been working part time for 6 years and not paying stamp. Previously my forecast said I was fully paid up 30/30 years so I thought nothing of it.

I can maybe commence paying NI contributions for this job but I might pack it in soon as all my outstanding debts ie mortgage are finished etc now and I'm only working out of choice.

I am 66 on 29 October 2020.

Many thanks for any replies and advice.

p00hsticks

As silvertabby says, there is no point in paying up years pre April 2016 as they're not going to increase your pension amount.

From April 2016 each year paid up to the tax year before you retire (i.e. 2016-17, 2017-18, 2018-19 and 2019-20) will increase your amount by around £4.50 a week.

molerat

You need to pay the £589.10 for 2016-17 by 5 April 2019 to keep it at that price, it will increase to whatever the cost is in the year you pay it after then. You then need to contribute for 2017-18, 18-19 and 19-20 by whatever means and that will bring you up to the £148.82 quoted. Class 3 contributions are currently around £741 per year but pay back in 3-5 years depending on your tax situation. Obviously part time work, benefits or looking after grandchildren could contribute towards those years. Paying the pre 2016 years will add nothing so forget about them.

NE5

what if I stop working part time, how do I pay the last 2 years ? Voluntary from my pension ?

molerat

NE5 wrote: »

what if I stop working part time, how do I pay the last 2 years ? Voluntary from my pension ?

Yes, voluntary class 3 contributions.

NE5

Thanks. I'm starting to understand the furore about this when the rules changed now....

does it also mean that EVERYBODY in my age group was short before the April 2016 cut off point ?

And how does it affect people who might be retired early on medical grounds or something and can't work again ? I presume if I go to sign on I will get a credit instead ? Not that I'm doing that again because I'm not I've done my share of that.

One thing I'm going to do immediately when I'm at work on Thursday is tell them I want to start paying NI conts from now again.

Silvertabby

does it also mean that EVERYBODY in my age group was short before the April 2016 cut off point ?

No. Only those of us who paid reduced NI because we were/had been members of contracted out occupational or, (less commonly) private pensions. Someone who had never been contracted out would have paid full rate NI and could have accrued far more than £160 through their SERPS/SP2 top ups.

In theory, the amount of SERPS/SP2 you gave up by contracting out will be included with your occupational pension - so one way of looking at it is that you'll get this from when you retire instead of waiting until you are 66.

And how does it affect people who might be retired early on medical grounds or something and can't work again ? I presume if I go to sign on I will get a credit instead ? Not that I'm doing that again because I'm not I've done my share of that.

Yes, you would get a credit if you sign on - but you would have to be 'actively seeking work' to qualify. Not sure how that would work as you are currently working part time.

One thing I'm going to do immediately when I'm at work on Thursday is tell them I want to start paying NI conts from now again.

You can only do this if you earn enough - and if you are then you would have been paying NI already.

molerat

Silvertabby wrote: »

You can only do this if you earn enough - and if you are then you would have been paying NI already.

Or credited if earning between £113 and £157 per week.