35 years of full NI contributions and state pension?

GazzaBloom

My wife currently works part time and reaches 35 full years NI contributions when she completes tax year April 2021/22. Our plan is for her to stop work after that, certainly for a year or so at least, possibly not returning to paid employment again, she will be age 52.

We have checked via Gov website what her state pension entitlement will be and her NI record and she will be entitled to full state pension less contracted out amount which she will receive through private pension, but, once you reach 35 full years NI contributions and lets say don't work again until you claim your state pension at age 67, is the full state pension “preserved” or are there other factors than may reduce the amount that we need to consider?

NottinghamKnight

35 years doesn't necessarily give the full state pension but does give your wife a state pension. If she was contracted out then the pension will be lower, this can be increased by working more years or making additional contributions, she needs to check her pension on the gov website, look past the first figure and lower down there will be a figure for what she has actually earned to date. this lower amount can be increased by around £5 per week for every extra year of NI contributions until she hits the maximum. 

NedS

Yes, the '35' year figure only applies to those who have accrued 35 years after 2016. Transitional rules apply to your wife and she may need more (or less) than 35 years to accrue a full state pension. It is worth paying for the additional years (if required) if she is not planning on working again to attain them through employment.

Dazed_and_C0nfused

We have checked via Gov website what her state pension entitlement will be and her NI record and she will be entitled to full state pension less contracted out amount which she will receive through private pension

No-one else's  forecast has ever said that and I doubt very much hers does.

You need to check it again and read past the headline £175.20 to be certain of what she has actually accrued to date (usually shown to 5 April 2020 at the moment) and whether any further years are necessary to reach £175.20.

If she does need 35 years it is pure coincidence as the standard 35 years rules do not apply to your wife.

dunstonh

We have checked via Gov website what her state pension entitlement will be and her NI record and she will be entitled to full state pension less contracted out amount which she will receive through private pensio

Its amazing just how many people make that mistake.  It is like they stop reading after the first line.

molerat

dunstonh said:

We have checked via Gov website what her state pension entitlement will be and her NI record and she will be entitled to full state pension less contracted out amount which she will receive through private pensio

Its amazing just how many people make that mistake.  It is like they stop reading after the first line.

And also think the COPE has an effect on that top line figure.

ratechaser

dunstonh said:

We have checked via Gov website what her state pension entitlement will be and her NI record and she will be entitled to full state pension less contracted out amount which she will receive through private pensio

Its amazing just how many people make that mistake.  It is like they stop reading after the first line.

My own view is that the forecast, and more specifically how COPE is treated (i.e. as a notional extra amount rather than a deduction from the top line number), could certainly be made clearer.

The fact that so many people make that mistake just emphasises the point...

Dazed_and_C0nfused

This is how it is explained,

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is£xx.xx a week.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

In most cases the private pension scheme you were contracted out to:

• will include an amount equal to the COPE amount
• may not individually identify the COPE amount

The total amount of pension paid by your workplace or personal pension schemes will depend on the scheme and on any investment choices.

SMcGill

I also found the following statement unclear. My forecast shows the full SP and says this cannot be improved. When I view my NI record it says I have

• 41 years of full contributions
• 10 years to contribute before 5 April 2030
• You do not have any gaps in your record

molerat

What is unclear ?

You currently have the maximum amount you can achieve - once at £175.20 (or more if your 2016 starting amount was above the new SP amount at the time) that is all you will get apart from the annual inflation increments.

You have made 41 years of contributions - pretty straightforward

You have 10 more full financial years before you reach SPA - but any NI contributions made during those years cannot add to your pension amount.  You will still have to pay NI if employed or self employed and have profits above the limits though

You have not missed any prior years - again what it says

SMcGill

10 years to contribute suggests I need to contribute for 10 years. It doesn’t say 10 years more years until I reach SPA which I agree would be a clearer statement!