Maximising state pension

monkeyspanner

Hope someone can advise.
My wife will qualify for state pension in Feb 2021.
She has 27 qualifying years of NI all prior to April 2016.
She is able to make up her NI years for 2008-9 onwards.
Her latest pension forecast is:
-£116.58 based on NI record to 5/4/2017
-£130.67 if contributions made until 5/4/2020
She was contracted out for a number of years.

My questions are:
- She can make up her NI contributions either to 30 or 35 years using the incomplete years from 2008-9 and has until April 2019 to do this at the current rates. Are there any pitfalls to avoid besides choosing the cheapest years?
- She qualifies for new state pension due to her age but the forecast does not detail if it is based on old or new rules and her associated NI record says she can add 3years to reach 30years. Is there any way of telling what the forecast is based on?
- Can she qualify for a full new state pension based on 35 years of NI contribution for years prior to 6April 2016?

Thanks.

Linton

In April 2016 people were credited with the higher of the SP they had earned under the old system, and how much they would earn under the new system with a deduction for years contracted out. Which ever route was taken will affect whether it is worth buying pre 2016 years. From your figures, I am not certain which one it is, but because of the Contracted Out deduction she could not reach a full state pension purely on pre 2016 contributions.


However as she has 27 years it is certainly worth buying 3 pre-2016 years to reach the old system max. It would only be worth buying more if her pre-2016 pension value was based on the new system. It would seem she is also able to buy 4 post-April 2016 years giving her a total of 34 years, one under what is required for a full SP.


This is my rough understanding. You can get a definitive answer from the Future Pensions Centre: https://www.gov.uk/future-pension-centre.

xylophone

See page 6 here

https://www.royallondon.com/global/documents/goodwithyourmoney/topping-up-your-state-pension-guide.pdf

molerat

The forecast should also give the maximum achievable with buying previous years.


Her 2016 figure is fairly easy to work out.
£116.58 / 1.03 / 1.025 = £110.42
You then work out
£155.65 / 35 x 27 - COPE. If that does not = £110.42 then
£119.30 / 30 x 27 + any possible add pen