trying to understand the state pension

elantan

Hi all,

so I usually get a state pension every couple of years, it's always shown I'm on goal to get full state pension, it used to show I would get extra as well ( not much) but it doesn't anymore.

I'm 46 I have 27 years full payment with 3 years of part payment ( was at university). My current amount is £145.06 a week and it states that in 5 years I will have paid enough to get full pension ( and yet I only have 27 years full payment)


my husband is 51 he has 35 years full payment but gets £140.01 per week, he was contracted out so this is to be expected. His states that is he pays for a further 6 years he will receive full money.

my questions are .

1) is the 27 years full payment with 5 more years to go till full pension wrong ? my understanding is I would need to pay 35 years for full pension ?

2) will my husband be entitled to the full pension in 6 years time ( I thought because he was contracted out he would never get full pension)

3) i can pay £155 to make up one of my lost years but it may go up after April, we intend on retiring in 8 years time leaving it kinda close to the 35 years for me ( currently 27 years) would it be advisable to pay it to have that wee bit of leeway just incase, I'm aware we may pay national insurance when we retire but I may just slip under that radar with the amount I will have coming in


thanks

molerat

35 years is not relevant to either of you. At April 2016 you were given the higher of the old or new system calculations at that date. If not contracted out you would likely have earned some additional pension which could have made the old calculation higher than the new, if contracted out the COPE deduction would again likely make the old calculation higher. The only people who would generally be on the new calculation at April 2016 would be those relying on credits or on a very low wage. From April 2016 you can make that amount up to the new full amount. If you currently have £145.06 you need £19.29 to reach the full amount. 4 more years will take you £163.86, just under the full amount. As you have less than 30 pre 2016 years that part paid year will add value but is it really worth it if you are going to continue working.

elantan

sorry trying to understand here ... Are u saying that we come under the 30 year deal ? I assumed everyone transferred to 35 years ( except possibly people close to retiring )


thanks

molerat

All those with a pre 2016 history are on a hybrid scheme, only those starting out after April 2016 are fully on the new 35 year scheme.You were given a starting amount in April 2016 which was the higher of the new or old calculations for your particular situation ensuring you received no less than what you had already accrued. You now can top hat figure with post 2016 contributions.

p00hsticks

When the New State Pension was introduced in April 2016, everyones current position was worked out under both the old and new rules ,and the higher of the two figures became your 'starting amount'

Old rules;
(number of NI years up to maximum of 30 / 30) x £119.65
+ any additional (SERPS/ S2P) pension

New rules;
(number of NI years up to maximum of 35 / 35) x £155.35
- any COPE (Contracted out Pension Equivalent) amount

Since then, every NI year you earn /pay/ get creditted with just adds 1/35th of the new maximum amount to that individual starting amount until either the maximum amount is reached or you get to the tax year in which you reach state pension age, whichever is sooner

AlanP_2

elantan wrote: »

3) i can pay £155 to make up one of my lost years but it may go up after April, we intend on retiring in 8 years time leaving it kinda close to the 35 years for me ( currently 27 years) would it be advisable to pay it to have that wee bit of leeway just incase, I'm aware we may pay national insurance when we retire but I may just slip under that radar with the amount I will have coming in


thanks

You don't pay NI on pension income, only earned income.

p00hsticks

AlanP wrote: »

You don't pay NI on pension income, only earned income.

And you don;t pay it on any earned income either once you're past State Pension Age

Triumph13

Also we are just coming to the end of a tax year so that won't be reflected in your forecast yet. That means only 3 more years to get to molerat's £163.86 or 4 years to get the full pension.
Your call on what the odds are of you working for another 4 years - or more probably 3 years and a few months depending on income.

pensionpawn

Officially I need to go to the end of the 21/22 tax year for my full state pension however I'm hoping that I'll hit the minimum contributions by June 2021, hence only another 27 months to go....

AlanP_2

p00hsticks wrote: »

And you don;t pay it on any earned income either once you're past State Pension Age

I'd forgotten that, thanks.