Voluntary State Pension Contributions.

arnhemrd

Hello everyone, help required please.

I've read all the posts on this forum regarding voluntary contributions only to be left with my head spinning. Ive read the pension service booklet, and ive also phoned the Gov.UK helpline twice and got conflicting information from them. I can only assume the helpline are making their advice up as they go along. I really got the impression that they didn't really want to help.

Hopefully I can get help for my own pension details from some kind people on this forum, who are more pension savvy. Or at least a push in the right direction.

Pension shortfall seems to be because I contracted out of SP and retired early on my private pension. I thought that as I had paid in for over the 30 year minimum i need not keep paying in.

My details are as follows from my pension summary:-


SP forecast £136.23 per week.


Est based on NI record to 5/4/18 £131.53 per week.


Pay NI shortfalls to increase SP to £140.93 per week.


Cope estimate (whatever this is) is £36.84 per week.


NI record 45 years full contributions.


1 year to contribute before 5/4/19.


4 years with not enough contributions.


Years 2018/19 record not available yet.
Years 2017/18 no contributions but can pay a AVC of £741.
Years 2016/17 & 2015/16 year is not full, we are checking to see if this counts toward your pension. you do not need to do anything.


As i am due my pension on the 7/5/19, I feel I need to know if it is actually worth the hassle of paying the AVCs, and if so which years to pay and how much?

Its especially misleading by not giving details for the shortfalls in the 2016/17 & 2015/16 years.
How do i go about getting a bill from Gov.UK for AVCs and actually paying it?
I will be a basic rate tax payer on the combined pensions.


Judging by the amount of people asking for help and advice and the conflicting advice given by the relevent government bodys, it seems that this system is far to complex to be handled by, presumably, call center staff on helplines.

Has anyone come across a specialist online company where I could send details for pensions advice. Obviously at a reasonable cost.

Thanks in advance, John.

molerat

You had the 30 years for the 2010 scheme but in 2016 it changed again. The good news is that you were given the best of the old or the new at that change over date and have the option of topping that up. COPE is a deduction from the new style pension calculation at April 2016, due to you paying lower NI when contracted out - the old pension already had that deduction built in, and used in deciding which was the higher at that date


As you have in excess of the maximum 35 pre 2016 years then filling any pre 2016 gaps will not add value so is pointless, 15-16 can be safely ignored. Filling any post 2016 gaps adds £4.70 per week per year purchased so is excellent value and pays back in 2 - 4 years depending on tax, you won't get anything close on the open market. The only point needing clarification is 2016-17, that needs sorting soon so you need to contact them and push for a hard answer.


Several methods of paying, https://www.gov.uk/pay-voluntary-class-3-national-insurance, my preference is a cheque in the post for the amounts shown in your NI record. You are unlikely to get any better information than you will get here.

Tom99

You can pay for a max of 2 yrs to bring you up to £140.93pw.
2016/17 will count and since you have a part contribution already may be cheaper than the full £733.20.
2017/18 at £741 will count so you could pay that now and chase up the 2016/17 detail.

squirrelpie

I have a similar question since I'm just reviewing my wife's state pension situation. Is it best to add my figures in here or start a new thread?

badmemory

As state pension age is in the 19/20 tax year (May) won't it be possible to pay 18/19 too?

Tom99

badmemory wrote: »

As state pension age is in the 19/20 tax year (May) won't it be possible to pay 18/19 too?

[FONT=Verdana, sans-serif]A good point, but the forecast only shows a max of 2yrs top up. Max SP £140.93 less £131.53 = £9.40pw / £4.70 = 2 yrs.[/FONT]
[FONT=Verdana, sans-serif]Maybe the 2016/17 part payment has been included in the £131.53? Needs clarifying.[/FONT]

xylophone

Cope estimate (whatever this is) is £36.84 per week.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

At 6/4/16 two calculations were done for you.

Old Rules

30/30 X £119.30 + (SERPS/S2P - COD / "notional COD")

New Rules

(35/35 x £155.65) - Contracted Out Pension Equivalent.

Your Starting Amount was the higher of the two.


Contributions for the tax year in which you reach SPA will not count.

arnhemrd

arnhemrd wrote: »

Hello everyone, help required please.

SP forecast £136.23 per week.

Est based on NI record to 5/4/18 £131.53 per week.

Pay NI shortfalls to increase SP to £140.93 per week.

Cope estimate (whatever this is) is £36.84 per week.

NI record 45 years full contributions.

1 year to contribute before 5/4/19.

4 years with not enough contributions.

Years 2018/19 record not available yet.
Years 2017/18 no contributions but can pay a AVC of £741.
Years 2016/17 & 2015/16 year is not full, we are checking to see if this counts toward your pension. you do not need to do anything.

Thanks in advance, John.

Latest update after calling the pensions helpline to query the missing figures, and then calling the HMRC to confirm, is as follows:-
Pay years 2016/17 £733.20.
Pay years 2017/18 £741.00.
Pay years 2018/19 £761.80.
So a total amount to pay of £2236.00.
Payment of these extra years will give me a pension of £145.63.
per week.
Do these figures sound right to you folks?
I dont have a lot of faith in what they tell me.

Pensions helpline told me that i could request an invoice from HMRC and choose how to pay the outstanding years, but the HMRC state, that the only way to pay this money due to them, is to the account number and sort number they supplied, along with an 18 digit reference number, or to do this online. So again the 2 agencys cant seem to get facts straight.
Anyway, thanks for your help, and i hope these figures will help give an insight to anyone in a similar position.

Pension Helpline Tel No is 08007310181.
HMRC Tel No is 03002003500.

molerat

Looks OK to me. As I thought, 2016-17 didn't exist whilst it was in query - neither paid or available - so it is now available to purchase and so you can now add 3 years = £14.10 to your existing £131.53 = 145.63. £2236 / 14.10 = 159 weeks to get back. 16-17 needs paying before April as it will rise to £780.00 after.

Tom99

arnhemrd wrote: »

Latest update after calling the pensions helpline to query the missing figures, and then calling the HMRC to confirm, is as follows:-
Pay years 2016/17 £733.20.
Pay years 2017/18 £741.00.
Pay years 2018/19 £761.80.
So a total amount to pay of £2236.00.
Payment of these extra years will give me a pension of £145.63.
per week.
Do these figures sound right to you folks?
I dont have a lot of faith in what they tell me.

Pensions helpline told me that i could request an invoice from HMRC and choose how to pay the outstanding years, but the HMRC state, that the only way to pay this money due to them, is to the account number and sort number they supplied, along with an 18 digit reference number, or to do this online. So again the 2 agencys cant seem to get facts straight.
Anyway, thanks for your help, and i hope these figures will help give an insight to anyone in a similar position.

Pension Helpline Tel No is 08007310181.
HMRC Tel No is 03002003500.

I found a letter and a cheque to be the simplest way to pay multiple years.
The figure look ok but previously you had been told you had a year part paid for 2016/17 but now they want the full amount of £733.20?