State Pension Forecast states I have NI gaps but I have 40 years of full contributions

JasperJackson

I wonder if anyone can help with my query.  The Gov website says I have a pension shortfall but also says that I have 40 years of full contributions.  Isn't that enough qualifying years?  It also states that I have 4 years to contribute before 5 April 2024 and that I have 6 years when I did not contribute enough.  How can it be true that I have 40 years of full contributions but have still not contributed enough?  My understanding is I need 35 years to qualify for a full state pension so I am at a loss.  Can anyone help explain it to me? 

molerat

35 years is only applicable to those starting out after 2016. With a pre 2016 history you are on a hybrid scheme where you were given the better of the old or new schemes at the start of the new pension.  With 40 years and not having the full amount means you were likely in a contracted out pension. You are now able to top up your old scheme amount post 2016, something you could not do under the old scheme, the best of both worlds.

xylophone

It would appear that you had at least 35 full years at 6/4/16.


Two calculations were done

Old Rules

£119.30 (Full basic because you had at least 30 NI years) +  ( Additional State Pension - Deduction for Contracting Out into  a Pension Scheme)

New Rules

£155.65 (Full NSP because you had at least 35 years) - Contracted Out Pension Equivalent.

Your COPE will be shown on the second page of your State Pension Statement.

Your "starting amount" was the higher of the two.

You were under SPA at 6/4/16 and therefore were able to improve your entitlement up to (but not in excess of) a full NSP by contributions or credits up to the tax year before that in which you reached SPA.

Dazed_and_C0nfused

My understanding is I need 35 years to qualify for a full state pension so I am at a loss

Out of interest why did you think that?  

This seems to be the most common misconception on this board despite gov.uk clearly stating 35 years is for people who didn't pay NI (or get NI credits) before 6 April 2016.

You did not make National Insurance contributions or get National Insurance credits before 6 April 2016

Your State Pension will be calculated entirely under the new State Pension rules.

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension.

You’ll need 35 qualifying years to get the full new State Pension.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

https://www.gov.uk/new-state-pension/how-its-calculated

GunJack

The problem with "35 years" is that the media widely (and inaccurately) reported that from April 2016 you needed 35 years, WITHOUT making it clear that if you already had NI years in before 2106 you were on the hybrid scheme and so it could mean more or less than 35 years depending on personal NI history.

An awful lot of people in the country, especially those who don't take much notice of such things, just took the misleading 35 years headline and thought, ok, it's 35 years full stop.

savingmore

yes it has been confusing, the above posters all correct.  my dh has 44 years and still won’t get full sp because of 15 years of contracting out.

p00hsticks

Dazed_and_C0nfused said:

My understanding is I need 35 years to qualify for a full state pension so I am at a loss

Out of interest why did you think that?  

This seems to be the most common misconception on this board despite gov.uk clearly stating 35 years is for people who didn't pay NI (or get NI credits) before 6 April 2016.

Possibly they've been looking at the Pensions guide on this site itself, which perpetuates the '35 years for a full state pension if you retire after 2016' inaccuracy.

I've already raised this (and other inaccuracies in the guide) with the MSE team who tell me they are looking to rewrite the guide.

https://forums.moneysavingexpert.com/discussion/6284356/mse-pension-guide-inaccuracies#latest