state pension/contracted out/ and other questions..

C_Mababejive

I am pretty sure this has been covered before but im a bit bewildered by it.

Just checking my forecast it says..

My state pension forecast in 2031 will be £8575.55

I understand that this is the current rate of new state pension and that by 2031 if i get to claim it it will have increased by whatever annual mechanisms prevail.

It then says that as of now ive earned £139.52 pw and that if i pay another 6 years in before 2030 ill get £164.35 pw i.e 8575.55 pa as above.

BUT,,for the whole of my working life ive been contracted out in a DB scheme,,,,err,,so why are they apparently going to give me a full state pension when i havent apparently contributed the full whack?

What if i retire from work earlier? Will i get a lesser state pension if i cant pay the other six years?

How long do i have to pay NI for? If i retired next year could i some how buy the other 6 years that are missing and if so,how could i find out the cost??

Thanks all

molerat

What if i retire from work earlier? Will i get a lesser state pension if i cant pay the other six years?

Yes, reaching that maximum figure is dependent on you contributing for another 6 years, each year contributed will give you an extra £4.70 - you actually get to £163.02 with 5 years. If you stop working earlier you have the option of topping up with class 3 voluntary contributions at, for the current year, £761.80.

BUT,,for the whole of my working life ive been contracted out in a DB scheme,,,,err,,so why are they apparently going to give me a full state pension when i havent apparently contributed the full whack?

In 2016 you were given what you had accrued so far under the old system and then, if it was less than the new full amount, given a second bite at the cherry if you contributed some more.

Dazed_and_confused

Will i get a lesser state pension if i cant pay the other six years?

No. You are guaranteed the £139.52/week, this cannot be reduced unless there was an error in calculating this figure in the first place.

But you now have the chance to make it up to £164.35/week.

Consider yourself a winner under the new system.

C_Mababejive

Hmmm ,so somewhere there will be data published each year on how much i could buy a missing year for? Its a bit of a gamble because i might may out circa £700 per year and never get to claim my SP or get the full benefit of it.

Dazed_and_confused

Try this for starters.

https://www.gov.uk/voluntary-national-insurance-contributions/rates

DairyQueen

C_Mababejive wrote: »

Hmmm ,so somewhere there will be data published each year on how much i could buy a missing year for? Its a bit of a gamble because i might may out circa £700 per year and never get to claim my SP or get the full benefit of it.

Given the likelihood of you living way beyond SPA, taxpayers of the future will be delighted if you forego the bet. I assume that you are not a regular at the bookies?

Do the maths.

mgdavid

C_Mababejive wrote: »

...... Its a bit of a gamble because i might may out circa £700 per year and never get to claim my SP or get the full benefit of it.

Have a play with this:
http://www.riskprediction.org.uk/index_lifeexp.php


Not knowing your personal additional factors, the base prediction is you will live to 82.

C_Mababejive

mgdavid wrote: »

Have a play with this:
http://www.riskprediction.org.uk/index_lifeexp.php


Not knowing your personal additional factors, the base prediction is you will live to 82.

Yes that looks about right for me though im amazed that switching to high exercise bumps it up to 85..

p00hsticks

C_Mababejive wrote: »

Yes that looks about right for me though im amazed that switching to high exercise bumps it up to 85..

In which case buying additonal years NI to increase your state pension is really good value, as you break even before you reach the age of 70 and are in profit for every year after.

If you decide to do this at any point, you can set up a monthly direct debit to pay for the current year .

Spreadsheetman

mgdavid wrote: »

Have a play with this:
http://www.riskprediction.org.uk/index_lifeexp.php


Not knowing your personal additional factors, the base prediction is you will live to 82.

That's interesting. I need to drink more and gain a little weight to max my life expectancy...

C_Mababejive

Not sure im right on this but if you were to cease work early,,say 55,,but still continue to sign on,you;d automatically be granted those extra years anyway...??