NIC's in SPA year?

pensionpuzzler

So my missus, who has to be obeyed, reaches State Pension Age on 1st March 2020.
She has been buying years since 2016 and works self employed so she is buying Class 2 NIC's voluntarily.
Thing is, she can't reach the maximum pension, currently at £164. She has 30 years up to 2016 and then will have these few additional years of new pension from 2016.
Am I right in thinking that the year in which she reaches SPA does not count towards her pension?
In other words, she can buy Class2 for 16/17 - 17/18 - 18/19 which is three years of new pension in total. Because her SPA of 1.3.2020 is just one month before the end of the tax year 19/20 there is no point in buying Class 2 NIC's for that year as it won't count towards her pension years. (Earnings are below the Small Profits Threshold so she has option to buy Class 2 voluntarily)
Can anyone clear me up for her that has to be obeyed?

jem16

Your are correct. The year in which she reaches SPA is not counted so paying for 2019/20 would be a waste of money.

pensionpuzzler

Darn. As I suspected.

That's a pain. Only because her SPA is so close to the end of the tax year. She could have 48 weeks. I did wonder if they done a percentage for the year in which SPA is reached e.g. in this case, 48/52.

I'm taking it there is no way round this then?

jem16

No there is no way round it.

Dazed_and_confused

Is your expectation of her State Pension amount based on the assumption that 35 years is what matters or have you/your wife looked at her State Pension forecast on gov.uk?

pensionpuzzler

She can't get the forecast on gov.uk as she has paid married woman's stamp. Apparently that seems too complicated for them to work out and therefore are unable to provide the forecast on the site.

She can't get maximum because she wont be able to add enough new pension post 2016 years. Thus with 30 years pre 2016 she will get the full basic pension, currently £125.90 I believe. With three post 16 years at £4.80 per week, the max she can get would be about £140 per week.

By my reckoning, to get the full max of £164 you would need to add about 7 post 2016 years to the 30 years for the full Basic State pension. (That's assuming no additional pension etc)

xylophone

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

If she can't get it on line has she tried the form?

jem16

pensionpuzzler wrote: »

She can't get the forecast on gov.uk as she has paid married woman's stamp. Apparently that seems too complicated for them to work out and therefore are unable to provide the forecast on the site.

She can't get maximum because she wont be able to add enough new pension post 2016 years. Thus with 30 years pre 2016 she will get the full basic pension, currently £125.90 I believe. With three post 16 years at £4.80 per week, the max she can get would be about £140 per week.

We need to clarify the married woman's stamp part. Has she always paid the married woman's rate or are you saying that she paid it for some years but that she has 30 years paid at the full rate?

If she has always paid married woman's stamp she would only qualify for a Category B pension which is 60% of Basic State pension.

By my reckoning, to get the full max of £164 you would need to add about 7 post 2016 years to the 30 years for the full Basic State pension. (That's assuming no additional pension etc)

More or less correct but why would she not have any SERPS/S2P? Was she also contracted out?

You really need to get an actual forecast instead of guessing.

DairyQueen

Agree with jem. Don't make any assumptions about her 2016 starting position if she has paid the reduced married woman's NI rate for all/part of her working life. That will definitely reduce her entitlement to less than someone who has never paid the reduced rate for 30 years contributions to 2016 . Unsurprisingly, paying less Ni results in less pension.

I think she needs to call and request a pension forecast so that she knows exactly her current entitlement. Having said that, I agree that any contributions she now makes at the Class 2 (or 3) rate before the year in which she reaches SPa will increase her SP by 1/35 of the prevailing rate. It's a no-brainer for those who fall below the max entitlement for the nSP to accrue as many post-2016 years as possible up to the max amount possible.

Unfortunately, those whose birthdays fall at the tail-end of the tax year luck-out in the SP accrual stakes. Those whose birthdays fall at the beginning of the tax year should thank their parents. Your spouse is lucky. Had she been employed under PAYE then she would be denied the option to pay NI in the year in which she reaches SPa. She would have to pay regardless.

pensionpuzzler

I should have been clear.

She has had a paper forecast and that shows she has 31 qualifying years to year 16/17. 30 years on the old pension and one year on the new pension.

The married womans stamp was only for a certain number of years when she was younger. I'm the second husband so I was the trade in model. When all her christmasses and birthdays came together when she married me, her previous married woman's stamp went out the window in any case so counted for zilch.

So agree with you both on your points. My main enquiry was just to see if there was any way of making a full year out of the the year she reaches SPA. Just a bit of a bummer being so close and yet so far. Her SPA is actually 6th March 2020 - just four weeks short of making a full year.

DairyQueen

It's definitely a bummer for anyone born toward the back end of the tax year. My bro-in-law was born on 21st March. Any advances on that? 5th April anyone? OH was born late April, and I am early May (a small consolation for the increase to 66 for us both).