Questions on additional NI contributions to make up a 5 year shortfall

TennisFan

molerat said:

TennisFan said:

molerat said:

I am afraid you are looking at it wrongly and completely misunderstanding how the pension works.

What is your current amount stated as "up to April 2020" ?  Take that away from £175.20 then divide the answer by 5 which will give the number of years you need.  With 39 years and less than the full amount points to you being contracted out at some time with a COPE amount - which will be stated on the forecast - and means purchasing any years prior to 2016 will not add to your pension. The pension forecast also states exactly what the maximum amounts you can achieve both going forwards - if your birthday is after April 6th - and by buying prior years.

The State Pension summary doesn't have an 'April 2020' figure, but the 'April 2021' figure is £162.51. So, taking that away from £175.20 and dividing by 5 gives 4.54 years needed.
Yes, I was contracted out for a while, hence COPE is a factor. My National Insurance record statement gives me shortfall figures going back several years beyond 2015 - 16  so implies I can add them to my pension calculation.
As 2015 - 16 has only a small shortfall I was hoping to use it in the top up.
By birthday is towards the end of April and my state pension would start this year (just had the letter inviting me to apply for it!). 

Some confusion here.  Is your statement on line or a paper one ?

The on line statement should give 3 figures

Amount estimated at retirement date using current amount held plus any available years going forward

Current amount held at April 2020

Maximum amount you can achieve, a "you can improve your forecast" statement, using both forward and back years.

As you have not contributed since 2016 and you have in excess of 35 pre 2016 years you cannot improve the forecast using pre 2016 years.  All additional years purchased must come from post 2016.

Very sorry - I misunderstood / misread ..... it's an online statement from a few days ago, it has 4 figures on it :
"You can get your state pension  on xx April 2021. Your forecast is £157.51 a week.
Estimate based on National Insurance Record up to 5th April 2020 : £152.50
Forecast if you contribute until 5th April 2021 : £157.51 a week
The most you can increase your forecast to is : £175.20 a week "
So, (£175.20 - £152.50)/5 = 3.538 years .... does that imply I need to top up 4 years?
Hope that makes more sense

Dazed_and_C0nfused

No, you still need 5 years.

Unless you think 2020:21 will be a qualifying year?

molerat

TennisFan said:

Very sorry - I misunderstood / misread ..... it's an online statement from a few days ago, it has 4 figures on it :
"You can get your state pension  on xx April 2021. Your forecast is £157.51 a week.
Estimate based on National Insurance Record up to 5th April 2020 : £152.50
Forecast if you contribute until 5th April 2021 : £157.51 a week
The most you can increase your forecast to is : £175.20 a week "
So, (£175.20 - £152.50)/5 = 3.538 years .... does that imply I need to top up 4 years?
Hope that makes more sense

That's better

You need 5 years to reach the full amount, 175.20 - 152.50 = 22.70 / 5 = 4.54 years. 4 will take you to £172.52 and the 5th will give you another £2.68 so will take longer to recoup.  All years must be from post 2016.

You now need to speak to FPC for confirmation then to HMRC to arrange for payment, they will ask if you have spoken to FPC.  You may not able to pay for the current year yet, only speaking to HMRC will confirm that.

TennisFan

molerat said:

TennisFan said:

Very sorry - I misunderstood / misread ..... it's an online statement from a few days ago, it has 4 figures on it :
"You can get your state pension  on xx April 2021. Your forecast is £157.51 a week.
Estimate based on National Insurance Record up to 5th April 2020 : £152.50
Forecast if you contribute until 5th April 2021 : £157.51 a week
The most you can increase your forecast to is : £175.20 a week "
So, (£175.20 - £152.50)/5 = 3.538 years .... does that imply I need to top up 4 years?
Hope that makes more sense

That's better

You need 5 years to reach the full amount, 175.20 - 152.50 = 22.70 / 5 = 4.54 years. 4 will take you to £172.52 and the 5th will give you another £2.68 so will take longer to recoup.  All years must be from post 2016.

You now need to speak to FPC for confirmation then to HMRC to arrange for payment, they will ask if you have spoken to FPC.  You may not able to pay for the current year yet, only speaking to HMRC will confirm that.

Thank you so so much - I'm normally pretty good when it comes to understanding facts and figures and doing the maths, but I think I've been staring at all the pension figures for so long I went cross eyed - couldn't even divide by 5 properly ! 
My challenge now is to manage to make contact with the FPC - I tried 8 times last week - hanging on for an average 20 mins each time before giving up, I guess I'll have to hang on for longer.  (I've completed a FPC online contact form, but don't hold out much hope of getting a reply that way).