Please can you check my calcs - maximising SP

Noodling

Can you please sanity check my thoughts below on maximising my OH's State Pension?

He has spent most of his working life self-employed and paying no attention to his SP forecast. He recently took a job as a full time employee and pays tax and NI under PAYE. By the end of the current tax year (2018/19) he will have 30 Full Years of NI. He plans to work another 3 years under PAYE above the NI contribution threshold. So, he will be 2 years short of full SP.

He has gaps in his NI record from when he was self-employed and I *think* he should pay years 2008/09 and 2009/10 - can you confirm this or correct as appropiate? Thanks.

Pre April 2016
Up to and including tax year ending April 2016 - he has 28 Full Years of NI.

He has 7 years that are Not Full (probably zero contribs) starting 2008/09 through to 2014/15. These years will qualify for voluntary Class 2 NICs.

Post April 2016
Post April 2016 he has/will have (including the year we are in) 2 Full Years of NI + the 3 planned future years.

Dox

Not clear from your question if you've actually got a state pension forecast for your husband: https://www.gov.uk/check-state-pension

He may have 30 years of contributions, but it sounds as if 'not enough' of them are post-April 2016 to count for a full state pension. The forecast will give you more info.

Noodling

Hi Dox. Yes I've got a forecast, which of course excludes the current tax year and it says it is £127.38 per week and he needs anothe 8 years conributions (so 7 after this year).
I thought that by paying 2 pre 2016 years (taking the total to 30) it would increase the 'starting amount' that the forecast is based on.
Am I missing something?

xylophone

https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf

Your husband has never been "contracted out"? (No COPE on forecast?)

At 6/4/16 two calculations would have been done

NI years/30 x £119.30 + Additional State Pension. (Old Rules)

NI years/35 x £155.65 (New Rules).

His starting amount would have been the higher of the two.

He can see the link above and check with the Future Pensions Centre before making payments.

https://www.gov.uk/future-pension-centre

squirrelpie

Also, when does he get to state pension age?

Noodling

He gets SP in 2026 - age 66.

molerat

If less than 30 pre 2016 years are held then making up to 30 cannot fail to add value whichever calculation the 2016 starting amount was based on. If he has not been contracted out and is not showing a COPE amount then making up to beyond 30 pre 2016 may be possible and, if the starting amount is based on the old system, may swing to the new calculation at the expense of any additional pension but the opportunity to pay at class 2 rates may make this viable with 1 class 3 year costing the same as 5 class 2. A spreadsheet needs to be set up to work it out.

Noodling

He has a COPE amount of £8.33 per week.

xylophone

He has a COPE amount of £8.33 per week.

Then the calculation was

NI/30 x £119.30 + (Additional State Pension - deduction in respect of contracting out)

(NI/35 x £155.65) - COPE.

Does he have a deferred pension with a former employer or a pension policy with an insurer in respect of contracting out?

Noodling

Yes - he has a tiny deferred DB pension from 3 years paid emplyment a long time ago.

xylophone

He should check his situation re improving his state pension with FPC.