State pension forecast query

Devo

Hey everyone,

Quick question on behalf of my father who will hit retirement age in 2019.

We checked his forecast online and it shows this:

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We then looked at his NI record and it shows this:

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So, is that saying he just needs to pay one more full year to get his full entitlement? I thought 35 years enough to get the full whack?

Many thanks in advance for your replies...

marlot

If your father is still working, he may already have paid enough to be credited with 2018-19, just that it's not showing yet.


What does it say under each year of the NI record - follow the link.

Devo

Thanks for the swift reply, Marlot!

So my next question is can he choose any of the short years to pay? The reason I ask is because they all have different amounts listed.

For example, if we look at 2017/2018 it shows:



Then, for 2010/2011 it shows:



Can he pay the £626.60 and then be entitled to the full whack?

It's worth noting that he's lived abroad since 2007 (retired early), which is why his voluntary contributions are higher than usual.

SnowMan

35 years to get the full New State Pension of £164.35pw only applies to someone who comes completely under the New State Pension. that is whose national insurance record covers the post April 2016 period only, so roughly speaking those who are 19 years old ish or less.

Your dad comes under the transitional period with pre and post 2016 national insurance. This has an adjustment for the technicality of contracting out of the additional state pension (that applied before 6th April 2016).

Your dad's record may show a COPE figure (click on the 'you were contracted out' link to see this), then working back this COPE deduction must be more than £19.57pw. Is that right?

His record says that the 2016/2017 and 2017/2018 are missing (by deduction it has to be these 2 years that are missing). It is usually worth purchasing these years (as the payback period is only about 4 years after SPA). That will bring his state pension up to £159.56pw just as the record says, but not to the full £164.35pw.

This assumes that 2018/2019 is a Qualifying Year. If not he should probably buy that year also.

What is the cost of buying these 2016/2017 and 2017/2018 years shown on his national insurance record for 2016/2017 and 2017/2018. It will be £733.20pw and £741pw if there are no credited weeks.

If he may qualify for means tested benefits in retirement (e.g. pension credit) then paying class 3 voluntary contributions may not be a good idea after all.

Note if he has missing contributions for the 2015/2016 tax year or before, paying these will be wasted money. It is only the 2016/2017 and 2017/2018 years that are worth buying.

SnowMan

Devo wrote: »

Thanks for the swift reply, Marlot!

So my next question is can he choose any of the short years to pay? The reason I ask is because they all have different amounts listed.

For example, if we look at 2017/2018 it shows:



Then, for 2010/2011 it shows:



Can he pay the £626.60 and then be entitled to the full whack?

It's worth noting that he's lived abroad since 2007 (retired early), which is why his voluntary contributions are higher than usual.

Buying 2010/2011 won't help because your Dad already had 35 Qualifying Years up to 5th April 2016. And 35 is the maximum number of Qualifying Years that count in calculating his starting amount at 5th April 2016 under the new state pension.

Buying 2017/2018 (and 2016/2017 must be missing also?) is a good idea here.

Devo

Thanks, snowman.

He stopped paying contributions when he retired early to Asia in 2007, so his record shows 'year is not full' for 2007-2008 right up to 2017-2018.

By the looks of it, he was contracted out. It says "Contracted Out Pension Equivalent (COPE)
Your COPE estimate is £60.31 a week.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government."

Am I missing something? He only needs to buy one more year, correct?

Devo

SnowMan wrote: »

Buying 2010/2011 won't help because your Dad already had 35 Qualifying Years up to 5th April 2016. And 35 is the maximum number of Qualifying Years that count in calculating his starting amount at 5th April 2016 under teh new staate pension.


Buying 2017/2018 (and 2016/2017 must be missing also?) is a good idea here.

So as it says that he only needs one more year, should he go ahead and buy 2017/2018 at £741? Will that get him the full whack, so to speak?

EDIT - or even 2016/2017 as that's a little cheaper!?

SnowMan

Devo wrote: »

It's worth noting that he's lived abroad since 2007 (retired early), which is why his voluntary contributions are higher than usual.

That's a potential problem/complication with all this.

But for the abroad issue then he should buy 2016/2017 and 2017/2018. The year to get him to £150.17pw is the 2018/2019 year (which he will need to buy). And the years to get him to £159.56pw are the 2016/2017 and 2017/2018 years (on top of the 2018/2019 year).

Where is he living and is he living there permanently, and has he worked at all since he has been abroad? And has he paid any national insurance equivalent in that country?

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

Living abroad but not working: Class 3 - but only if at some point you’ve lived in the UK continuously for 3 years and paid 3 years of contributions

Not an expert on cross border issues so worth checking with the Pensions Service.

Tom99

[FONT=Verdana, sans-serif]

SnowMan wrote: »

35 years to get the full New State Pension of £164.35pw only applies to someone who comes completely under the New State Pension. that is whose national insurance record covers the post April 2016 period only, so roughly speaking those who are 19 years oldish or less.

[/FONT]
[FONT=Verdana, sans-serif]That's not correct. If you have not been contracted out and have 35yr of full NI before 2016 you will get £164.35pw[/FONT]
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SnowMan wrote: »

His record says that the 2016/2017 and 2017/2018 are missing (by deduction it has to be these 2 years that are missing). It is usually worth purchasing these years (as the payback period is only about 4 years after SPA). That will bring his state pension up to £159.56pw just as the record says, but not to the full £164.35pw.
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[/FONT]
[FONT=Verdana, sans-serif]3 yrs are needed to bridge the gap between £145.47 and £159.56 so 2018/19 as well[/FONT]

GunJack

Tom99 wrote: »

[FONT=Verdana, sans-serif] [/FONT]
[FONT=Verdana, sans-serif]That's not correct. If you have not been contracted out and have 35yr of full NI before 2016 you will get £164.35pw[/FONT]

With 35 yrs of pre-2016 non-contracted-out NI, you'd expect there to be a reasonable amount ABOVE £164.odd due to SERPS/S2P, surely?

The second bit, yes I'd say 3 years to make up to £159...

Devo

SnowMan wrote: »

That's a huge potential problem with all this.

But for the abroad issue then he should buy 2016/2017 and 2017/2018. The year to get him to £150.17pw is the 2018/2019 year. And the years to get him to £159.56pw are the 2016/2017 and 2017/2018 years (on top of the 2018/2019 year).

Where is he living and is he living there permanently?

He's lived permanently in the Philippines (retired, not working) since 2007.

So he needs 3 full years to get the full entitlement? Why does it say 1 year? Sorry, just want to make sure we pay the right amount.

EDIT - and the other question is when does he need to pay them by? All of them before April next year or could he do just one initially?