Part year NI credits, do they count? Also part year shortfall question

smjxm09

At the moment I am getting NI credits as I am now a carer. My pension statement states I need 3 more years to receive a full state pension but I quick calculation shows me that I am actually 2.5 years short. It is unlikely that I will be a carer for another 3 years so I will top up my NI shortfall when the time comes. To get the last missing 6 months would I have to pay a full year or a partial year?


Also if I cease to be a carer part way through a financial year, which means my NI credits stop, would for example 20 weeks of NI credits count and would be worth 20/52 or again does only full year contributions count?

Dox

You need full years.

molerat

Only full years count so you need 3 years to reach the full amount

Sun-Is-Fun

The 20/52 weeks do count I believe, so you would only need to buy the additional 32 weeks to get a full year.

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

smjxm09

This is the relevant piece

Whatever State Pension system you come under, if you
paid some NICs in a financial year but not enough to
get a full qualifying year, you can make contributions
for these extra weeks.
For example, if you need an extra 10 weeks of
contributions for the 2010/11 financial year to make
up a qualifying year, it will cost you £146.50 (£14.65
x 10) if you’re under the old State Pension system and
£120.50 (£12.05 x 10) if you’re under the new system.

So this seems to answer my second question.

molerat

Yes, the weeks count as weeks but only a full year counts towards your pension so 2.5 years will not get you 2.5 years worth of pension, only 2. If you then make up that part year to a full year by whatever means it then counts. To get that extra £2.35 worth of pension you need the full year of credits.

Wicked_Lady

I have just made up 2 years on my State Pension. One of these was a full rate but I paid less for the other one as I already had a few weeks of credits - not many though!

Worked out that I should reap the benefits after about 3 years.

smjxm09

So the missing 6 months worth £122 per year or £97.67 after tax would cost me around £761 and take 8 years to recoup taking me to 74 years old. Not quite the bargain it first seems.

molerat

Considering that £761 would get you £24 after tax with an annuity the state pension option doesn't look too bad

Linton

smjxm09 wrote: »

So the missing 6 months worth £122 per year or £97.67 after tax would cost me around £761 and take 8 years to recoup taking me to 74 years old. Not quite the bargain it first seems.

Wouldnt 6 months worth of NI would cost you 26 X £14.65=£380?

molerat

Linton wrote: »

Wouldnt 6 months worth of NI would cost you 26 X £14.65=£380?

I think they are referring to paying a whole year to receive the missing half a year pension value.