Filling in missing NI years to boost state pension

GunJack

Iamadored wrote: »

OMG you have lost me. What specific information does the OP need to provide to enable you to determine whether the FPC has given him the correct advice?

wife's age
employment/benefits status
was the SP estimate done with or without FY 16/17 and 17/18 included?

as jamesd said, this could be a very close old/new rules calculation, and so the more detail the better.

molerat

If only FPC would provide an old rules and new rules calculation at April 2016. Oh, wait a minute, they used to but stopped it and dumbed it down as it confused people because they did not read what it was telling them and just looked at the numbers. I am sure there are even more people struggling now without that information.

kingsleypne

Many thanks to everyone for their comments.

I rang the FPC today and they will send a letter to my wife listing the options she has to boosting her state pension. It won't cover the cost of those options but we can get that from her NI record or advise her in any way which is perfectly reasonable but at least it will give us some reassurance.

Just to add a bit more detail. She is 55, has no plans to work again and is not receiving benefits. All her NI record was built up prior to 2016. She has 8 gap years prior to 2016, 2 of which are partial years. The cost of paying for the 6 cheapest of those years is approx £3200, so it seems a no-brainer to pay for both them and the two post-2016 years. I estimated that based on current state pension values it's worth she survives to receive her state pension for 3 years.

The calculation of her starting amount is currently quite close. Her "old" starting amount is 29/30 x 119.3 + 2.12 (additional state pension) = 117.44 and her "new" amount is 29/35 x 155.65 - 8.76 (COPE) = 120.21. To get "today's" value you need to multiply both by 1.025 and 1.0301 so £124 and £126.92 respectively.

Again, thanks for everyone's comments.

molerat

Has she been looking after grandchildren at all, another nice little NI earner, MrsM has saved £3.5K of class 3 !


You obviously are on top of this. Where did you get all those figures from, was it from you recent contact with FPS or did you have it from the old style forecasts ?

kingsleypne

No - sadly no grandchildren yet.

The figures are from a mixture of old pension statements, a recent pension forecast and the online pension/NI stuff. The written pension forecast is not helpful - all it stated was the estimate (£126.93), the forecast if she contributed another 8 years, and the COPE amount. No mention as to how these numbers were arrived at or how she could boost her pension. I eventually worked out (confirmed by you I think) how they got to 126.93. What I was concerned about was how savvy the FPC are but having spoken to them twice and with the information and comments from this thread, I feel more comfortable now. When I receive confirmation in their letter, I'll go ahead and pay to fill in the gaps.

What concerns me is that I have a basic understanding about the state pension and how it's changed and so I had enough information and the time to ring up and query it - other people without that understanding may find it more difficult.

jamesd

Thanks for the extra detail, I'm also now confident that the FPC were right and it's fine to go ahead and buy up to six pre-2016 years. The reasons not to buy that many are just uncertainties:

1. will grandchildren show up and will she care for them and get credits for doing it?
2. what will happen to the price in the future?
3. if the money or some portion of it was invested, would it row more than the future price increases?

People who ask here tend to be long term planners who favour getting it taken care of early.

jamesd

Tom99 wrote: »

Why would it not be? Presumably the contracted out period was only a few years which is why the new basis forecast is the higher.

SeekTruth explains a bit here about how it depends on when the contracting out happened, with the rebate derived amount deduction being the same as the contracted out deduction given on the statement if the contracting out was all before April 1997. Which appears to be so in this case.