N.I.payments

Silvertabby

I have already paid in enough contributions to get my full state pension at 66, but I was told that if I retire early at 60,then the N.I. will still have to be paid until I am 66
Originally posted by starmatch ”

Compulsory NI contributions are paid on employment income over £157 per week which does not include pension income and is payable up until state retirement age regardless of having paid enough for a "full" pension. As long as your pension forecast to date is at £155.65 or above then you have nothing to do or pay, sit back and enjoy your retirement. I must say that it is unusual to find someone who can afford to retire at 60 and have a full state pension !
Posted by molerat

Mr S retired at 60, having been contracted out since 1978 (RAF then Civil Service). He will be 65 next May and his current State pension forecast is £155 per week. Not quite the full whack, but not far off. Because we both took less stressful, lower paid jobs when we retired from the RAF we benefitted from the post 2002 SP2 top ups for those on less than average pay, plus Mr S has 2 years of free NI years post pension credit age.

My own forecast (contracted out from 1978 to 2016) is currently £145 per week, as I obviously don't get the 2 free years. We'll probably top mine up with a couple of years or so of voluntary contributions.

Audaxer

molerat wrote: »

I must say that it is unusual to find someone who can afford to retire at 60 and have a full state pension !

Is it unusual? I'm fairly sure that many people who retired at 60 or earlier will have 35 years of NI contributions, so they will receive full state pension when they reach 65 or 66.

molerat

Audaxer wrote: »

Is it unusual? I'm fairly sure that many people who retired at 60 or earlier will have 35 years of NI contributions, so they will receive full state pension when they reach 65 or 66.

But 35 years of contributions does not guarantee a full state pension. I personally have 39 years and will not be able to make the full £155.65.

Audaxer

molerat wrote: »

But 35 years of contributions does not guarantee a full state pension. I personally have 39 years and will not be able to make the full £155.65.

I must be missing something then, as the following page seems to indicate if you have 35 years or more contributions you will get the full new State Pension of £159.55 per week, unless you are already receiving the State Pension under the old rules?
https://www.gov.uk/new-state-pension/how-its-calculated

p00hsticks

Audaxer wrote: »

I must be missing something then, as the following page seems to indicate if you have 35 years or more contributions you will get the full new State Pension of £159.55 per week, unless you are already receiving the State Pension under the old rules?
https://www.gov.uk/new-state-pension/how-its-calculated

yes, you're missing something - the fact that there are transitional rules in place for those who were already well through their working lives when the new state pension was introduced. They could be entitled to more or less that £159.55 depending on their individual circumstances, although it is guaranteed not to be less than they had already accumulated under the old rules.

As an example, I currently have 36 NI years but need another seven to get to the full £159.55, due to having been contracted out for most of my working life). Others who have built up a lot of SERPS/S2P could still be entitled to over £200 a week.

The link you yourself have quoted goes into some detail about individual 'starting amounts' being calculated at the point of introduction.

People should get an individual state pension forecast to check their own positions.

https://www.gov.uk/check-state-pension

Silvertabby

p00hsticks is right.

DWP have complicated things by using the term 'full NI contributions' to mean a full financial year of contributions, whereas they should have said 'full NI contributions (ie, excludes years when reduced NI contributions were paid as a result of being contracted out (of SERPS/SP2)'.

p00hsticks

Silvertabby wrote: »

p00hsticks is right.

DWP have complicated things by using the term 'full NI contributions' to mean a full financial year of contributions, whereas they should have said 'full NI contributions (ie, excludes years when reduced NI contributions were paid as a result of being contracted out (of SERPS/SP2)'.

The page Audaxer has linked to is actually quite good at explaining things.

What Audaxer missed is the fact that the sentence

"You’ll need 35 qualifying years to get the full new State Pension."

only appears in the section entitled

"You didn’t make National Insurance contributions or get National Insurance credits before 6 April 2016"

Silvertabby

The page Audaxer has linked to is actually quite good at explaining things.

What Audaxer missed is the fact that the sentence

"You’ll need 35 qualifying years to get the full new State Pension."

only appears in the section entitled

"You didn’t make National Insurance contributions or get National Insurance credits before 6 April 2016"
Posted by P00hsticks

Even that doesn't make it crystal clear that a 'qualifying year' means that you have paid full NI, and not reduced NI by contracting out of SERPS/SP2.

The link includes this:

Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

But I know from my time as a LGPS administrator that many people have no idea if they are/have been contracted out.

I can see how some people have become confused!