State Pension & NI Contributions Query

Suseka97

Hello,
Forgive me for what may seem to be a daft question, but - having checked my SP forecast on the HMRC website.  It tells me that I currently need to make 3 years worth of contributions, before 2027, to receive the full SP of £175.20 per week.  The current estimate is a little over £163 per week as at 5.4.20.

I opted for voluntary redundancy from my workplace and had intended to look for new employment for a period of 2 - 3 years, before CV19 landed on our shores. So I effectively leave my employment at the end of July.  At that time I will be drawing on my DB pension and will receive the 25% TFLS and the VS payment.  So I'm okay as far as paying the bills go.  What I had planned to do was look for part-time work for the next few years and being a realist, I rather expect that not to be as easy as I'd hoped given the current (and growing) unemployment situation. 

When I 'retire' I will be 59 1/2 and my SPA isn't until aged 66yrs 10mths - so I'm assuming that between now and then if I cannot find any other form of employment I would need to top-up those 3 years by paying for voluntary contributions- yes?  I was surprised it would only be 3 years more contributions required, given that my SPA is not until 2027. 

I would like to add that I've found a lot of threads on this forum very enlightening, so thanks to everyone who offers their advice and time to support others on what I find to be a very complicated topic!

Edit - reading this back I realise I should have added that I would, of course, expect to find work over the next few years - although I had intended not to work beyond aged 63 when my OH then retires at 65 (hope this makes sense).

xylophone

Would you not qualify for new style JSA as a jobseeker when you leave employment?
https://www.gov.uk/jobseekers-allowance
https://www.gov.uk/national-insurance-credits/eligibility

molerat

Is 19-20 showing as full on your forecast ? It may not be showing yet. There is a possibility that you could fill this year by July. You may need less than you think. In theory you could have a full SP by age 51.

drumtochty

I do not think that that the tax year 19 / 20 would have been credited to your NI account yet.

It is usually around July 2020 before the HMRC machine records the 2019 / 2020 NI payments to your NI record.

As you are still working if your gross salary for 20/21 up until the end of July is £6,240, that will give you a further years NI credit over and above the 2019 / 2020 credit.

For you info if you do not earn a gross salary of £6,240 from your current employment before you leave the company and you take a further job this year to earn this years credit. You start from scratch with the next job and you have to earn a further £6,240 with the second employer this tax year to get the 2020 / 2021 NI credit.

Suseka97

Thank you all for your comments thus far.

To answer a few questions...
@xylophone - I haven't looked into JSA and would think it highly unlikely I would qualify. Not when you take my DB pension, VS payment and TFLS into account
@molerat, @drumtochty - looking at my NI record the 19/20 contributions are showing as full years.  Also, whilst I'm happy to turn the clock back, I think you meant to say in theory I could have a full SP by aged 61 (not 51) - which is good news. Although the fact I cannot get my hands on it until I'm almost 67 isn't!

If I have another 7 years to make up 3 years equivalent of NI contributions and with the opportunity to make voluntary NI contributions if it proves necessary - I'm certainly not complaining.  Whilst I have to admit had the CV19 storm landed sooner I might have reconsidered taking VS and hung out for another couple of years, but it is what it is.  I feel sad for all those who have lost, or will lose, their jobs at a much younger age (although I've had my share of redundancy over the years).

molerat

Suseka97 said:

.......  Also, whilst I'm happy to turn the clock back, I think you meant to say in theory I could have a full SP by aged 61 (not 51) ........

I meant people in general could reach full entitlement by 51, work from age 16 then 35 years contributions = age 51 after your comment about being surprised you only needed 3 years.

Suseka97

Ah... thanks molerat.
So to qualify for full SP, a person should have made NI contributions for the equivalent of 35 full years.  I've always found the NI calculation a rather peculiar one.  
From what I've read on this forum, if I don't get the full qualifying years, then its worthwhile topping up with voluntary payments.  Anyway, something for me to ponder and keep an eye on depending on whether I'm able to find some part-time work over the next few years.  It's going to be a bit of a roller coaster for many, employment wise, methinks.

xylophone

 I haven't looked into JSA and would think it highly unlikely I would qualify. Not when you take my DB pension, VS payment and TFLS into account 

Why not check? https://www.gov.uk/guidance/new-style-jobseekers-allowance

 Your pension income may be taken into account but it would be worth  claiming even if only to get the NI credits?

badmemory

You can get contribution based JSA for the first 6 months & then income based which will give you only credits.

Suseka97

Thanks xylophone and badmemory - I had no knowledge of the JSA and the fact you could get NI credits from it, even if you don't qualify for any allowance as such.  I'd always thought that JSA and such things were only for those with no income whatsoever and so its worth applying just for those NI credits in my case.  It was only through reading posts on this forum that I realised you don't pay NI on your pension - again, I'd assumed you would until SPA.  
So when I applied for VS I thought my NI contributions would continue, but I'm still holding on to the hope I may find a little part-time job, that was the plan when I applied for voluntary redundancy - anyway, this bit of very useful information is a most definite bonus!

Suseka97

molerat said:

Suseka97 said:

.......  Also, whilst I'm happy to turn the clock back, I think you meant to say in theory I could have a full SP by aged 61 (not 51) ........

I meant people in general could reach full entitlement by 51, work from age 16 then 35 years contributions = age 51 after your comment about being surprised you only needed 3 years.

I have a further question on this particular point, because my NI record confuses me...

Looking at the information on the HMRC website it tell me this under my state pension forecast:-
Estimate based on NI record up to 5 Apr 2020 = £163.96 a week
Forecast if you contribute another 3 years before 5 April 2027 = £175.20 
(and then goes on to say that £175.20 is the most I get, which I understand because this is the max SP).

But when I look at my NI contributions it tells me this:-
You have 44 years of full contributions
7 years to contribute before 5 April 2027
You do not have any gaps in your record

So if I have no gaps and 44 yrs worth of contributions why am I still 3 years short of the max SP?  Also why does it say I have 7 years to contribute before 5 April 2027?   I'm confused..