State pension and missing years

benwrigley

Hi All,
I've just been reading through the pages on this site about state pension and missing contributions and I must admit I'm still a bit confused.
I've checked my NI contributions and I can see 4 incomplete years (3 were university years and the other I am confused about). My ultimate question is whether or not this is worth contacting HMRC about?
The reason I'm not sure is that the same page showing my contributions says that 'Forecast if you contribute another 3 years before 5 April 2041 - £179.60 a week' which is the maximum I can get anyway. I'm only 46 now, and I'm definitely going to contribute another 3 years before 2041.
I had understood that *any* 'incomplete' years will affect my final payments, but is that actually the case?
I hope this makes sense. 
Thanks for your help!
Ben

p00hsticks

No need to worry, as long as you are going to get those three years at some point in the future.  Incomplete years only need to be made up if your forecast shows it's necessary, and yours doesn't.

xylophone

If you were not earning the requisite amount in the years in question, then you would not have been paying (or being credited) NI.

If these were all twenty years or more ago then it would be too late to pay voluntary contributions anyway.

You say that you have only three years to pay before you reach the maximum for full State Pension and you are only 46.

There's plenty of time!

MX5huggy

I’m not sure how you can be only 3 years short of full pension (35 years) when you are only 46 and have 4 years that are short. 

GunJack

MX5huggy said:

I’m not sure how you can be only 3 years short of full pension (35 years) when you are only 46 and have 4 years that are short. 

a high starting amount as at April 2016, implying a fair bit of SERPS/S2P

benwrigley

MX5huggy said:

I’m not sure how you can be only 3 years short of full pension (35 years) when you are only 46 and have 4 years that are short. 

To be honest I'm not sure myself!

benwrigley

So after the next three years, presumably any NI contributions I make don't go towards my future state pension then?

drumtochty

It goes towards the inflation on your state pension over the years and the NHS, not to increase the basic amount of your state pension which will be maxed out by then.

p00hsticks

MX5huggy said:

I’m not sure how you can be only 3 years short of full pension (35 years) when you are only 46 and have 4 years that are short. 

Because, as if often pointed out on these boards, 35 years is only applicable to those starting their working lifes after the introduction of the new State Pension in 2016. The rest of us are on transitional terms, and depending on our particular circumstances may need more  or less years to reach the maximum full pension.

I was contracted out all my working life, have 41 years NI but still need three more to get to £179.60 (I'm not complaining!)

Others like the OP were presumably contracted in prior to 2016, have accumulated some additional pension (SERPS/S2P) and so need less than 35.

Johnny_Doe

I've just had my state pension forecast and have a similar forecast to OP. I've only just completed 30 years contributions (3 yrs Uni didn't count) aged 48, so guessing have accumulated SERPS also? Never had a final salary pension, all defined contribution..

jamesd

Under a previous version of the old state pension - basic plus earnings-related - a man would accrue 1/44th of the basic state pension per qualifying year and a woman 1/39th. So back then taking care of older years mattered quite a bit.

The 2007 Pensions Act increased this accrual to 1/30th for both with a cap at 30 years and for those with fairly full UK work records made it much less important because it became easy to catch up and get to the maximum beneficial 30 years.

On top of this is the earnings-related part, which increases with pay from the NI starting point to the start of higher rate tax, with various boosts for the initial pay part over the years. This is hugely simplifying to give a correct general idea. This doesn't have a thirty year cap and you continue to accrue until state pension age. A lifelong high earner can have over £300 a week in state pension because of this and basic combined.

Along comes 2016 and the new state pension. This has a cap that's now £179.60 a week and however much you work you can't accrue more than this. 35 years spent solely under the new system would get that much. But nobody today can have done that and if their calculation under the old rules was higher they were set to that much as their 2016 foundation amount.

Today, higher earners who weren't contracted out of the earnings-related part just hit the cap and stop getting extra state pension sooner. Those who were contracted out can gain the new capability to benefit from years after 2016 until they reach the cap, and get their contracted out pension on top.