Cashing in small pension to make up state pension shortfall

ElephantBoy57

molerat said:

Pension access age is still currently 55 and no laws have yet been enacted to change that.  2032 - 67 + 55 = 2020 so accessible now.

Any idea if its going through Parliament, when will the change come in?

Gehngus

Yes. I am 55. I have the pack from phoenix life. Both are with phoenix so assume both incur management fees. 
I am to happy leave it where it is. But if paying for a year or two of state benefit is better I can do that. Maybe just the small one which is less than 2k?

Gehngus

OK. From what I have read.
I can up to take 25% tax free. 
This I could (somehow) then pay into NI to cover two years missed.
I will then have 2 years leeway just in case. 
But I may be over worrying because I was told (by a mate) if I didn't make the 35 years I would get nothing at all..no pension. Just lose it all? I'm not sure this is advice was correct. 

Dazed_and_C0nfused

The 35 years rules don't apply to you.

You are under transitional rules which are totally different.

I think your first step should be to check which tax year you could have and did pay Class 2 NI for as that is much cheaper than Class 3 (c£160 compared to c£800).

You really need to know the full position before rushing in and paying anything. 

Each extra year will get you £5/week State Pension upto a maximum of £175.20 (if you get to say £173.20 then another year can only add £2.00 to get you to £175.20).

Gehngus

I will look into this thank you. 
If I made a class 2 payment but it shows as a failed year, then I can query it.
I think this is case for the two most recent fails. I cant see anywhere in hmrc website that shows a statement of payments made so Ill have to scour my online statements for payments to hmrc. Happy days

Dazed_and_C0nfused

If you get those two years then that is an immediate £10 in increase to £127.88 meaning you only have another nine years that would each gain you an extra £5/week and one that would add £2.32 to bring it up to £175.20.

So a lot depends on what you expect your working pattern to be over the next few years.  If you remain self employed you can just make sure you pay Class 2 National Insurance each year (including voluntary Class 2 if profits are low).

AlanP_2

Gehngus said:

 
But I may be over worrying because I was told (by a mate) if I didn't make the 35 years I would get nothing at all..no pension. Just lose it all? I'm not sure this is advice was correct. 

That isn't advice, that is uninfomed, incorrect conjecture. Minimum accrual period is 10 years.