Simple living in the country - back to basics

Cheery_Daff

Re pensions... We're both trying to check state pensions and check whether it's worth back paying old years.

We rang HMRC (separately) a few weeks ago, and they wouldn't say anything at all, except that we had to ring the Future Pensions Centre to check if it was worth paying them back. Fine. 

Today we finally got round to ringing them, and in my case, it really wasn't worth the bother. I've got 2 part years i could potentially pay back, but only 16 more years to contribute (with at least 25 years til I reach state pension age). They just said 'well it's up to you whether you pay it back - if you do, and then work for another 16 years, you'll have paid more than you need to'. Er, yes I know that. HOW do I pay them should I decide to? Well, guess what - I have to ring the HMRC number I rang originally to get a code, which I then enter online.

As for Mr Cheery, he worked in the same job for 20 years, and inexplicably has 2 separate years of contributions missing from his record during that time. One was 2004/5 (I think), and they said 'ah yes, that's a notorious year, so much stuff was messed up' (!) They advised him to... guess what? Ring HMRC back, point out these missing years, and ask them to add them back into his record. 

I wonder how many other people are missing contributions from that messed up year and don't realise?!

His other issue was about Class 2 contributions, which he always paid automatically by DD, but then of course the system changed, and it's been hit and miss since then (apparently for everyone, what a fiasco!) Some years are fine, some he paid the money and then it was refunded back into our bank, some years (as far back as 2012) just say 'we are checking to see if this year counts towards your record'. 

Guess what they said? You'll need to ring HMRC so ask them to sort it out... 🙄

So I'm not entirely sure what the point of the Future Pensions Centre is. Maybe they're useful for some people, but in our case they've just served to as somewhere for HMRC to batt us off to, before we are batted back to HMRC again.

Mr Cheery is NOT one for bureaucracy but fortunately for him I am extremely persistent and we WILL sort this out, but I can imagine there are plenty who will give up.

Is it cynical to imagine this is some deliberate ploy to lessen the number of people who get the full state pension? Or am I being over generous imagining mliciousness when really it's just incompetence?? 

Anyway, can't sort out anything til Tuesday but will get on the case then.

With mine, I don't think I'm going to back pay. I'll be 58 in 16 years time, and while I don't want to still be working 4 days a week, it's pretty likely I'll still be doing something. One of my years is £283, so that might be worth it to give me more options, but I don't think it's worth the £700 year.

Hopefully they'll be able to sort Mr Cheery so his two missing years are credited without him paying any more, and hopefully they'll let him back pay class 2 for the years where he ticked the 'i would like to pay class 2 contributions automatically' (or whatever it says) box.

Sign...

South_coast

Cheery_Daff said:

Is it cynical to imagine this is some deliberate ploy to lessen the number of people who get the full state pension? Or am I being over generous imagining mliciousness when really it's just incompetence?? 

Er, no I think you just need some sleep 🤣!

Cheery_Daff

😂 I did get off pretty soon after that, although I now seem to be awake again 🙄 always find it easier to be asleep at the evening end of the day - I never was much good at sleeping in 🙄 (I can laze around in bed in the morning, just not sleep - although I rarely do that past 8am anyway now cos of the chickens).

Anyway, had a go on the Office for National Statistics personal inflation calculator this morning.

https://www.ons.gov.uk/economy/inflationandpriceindices/articles/howisinflationaffectingyourhouseholdcosts/2022-03-23

Interesting (and rather scary) stuff. Our household rate is 10.5% apparently, more than the given average on there of 8.8% for households with similar income, although different categories than the average. 

Most categories we spend less than average for a household of our income. Mortgage is 10% more, energy is 119% more (!), and diesel is 178% more (!!)

On the plus side - 81% less on holidays and 86% less on clothes (!) - apparently average household with our income spends £181 on clothes and footwear a month (which i suppose you can if you'renot spending more than that on energy or diesel...)

Hmm, interesting. On other calculators we use less than average energy for type of house - but it seems we have a bigger house than is average for people on our income 🙄 Our electric DD is £72 (and we're currently about £100 in credit i think) - it's gas that pushes us way over the average. I put aside £167 a month for LPG, although we only pay when we have a top up, and that might not be at the same times each year, and there's no meter, so it's hard to work out exact consumption.

LPG has always been more expensive, although I read recently that that's changing now - and I've rather miraculously just started a 2 year fix so hopefully our costs compared to the average should start to seem more reasonable over time. I've already talked about some of what we'll do to change what we use over the winter.

Apparently we spend an average of £335 more than we did this time last year on the categories in the calculator - which could explain why i find it so difficult to save anything from normal income at the minute 🙄 

Anyway, plenty to be doing and thinking about, as usual.

In the meantime, I should probably get up and start scything 🙄

SusieT

Well done for calling the pension people, at least you know where you are with them now. Its a shame you also need to get HMRC to get their side done, but well worth it. 
My understanding is that HMRC receive all the NI and allocate it to the individual years, and the record for the year will show as a complete year or incomplete. Some incomplete years a long time back will not be available to pay, and at the moment (depending on retirement age, comtributions and if the person was contracted out or not)  some people will find that filling pre 2016 years will not make a difference to the pension, for others it will. HMRC do not advise on tax or NI, but the future pensions people will be able to look at their system and can tell you what years will make a difference if you were to fill them. Its a pain, but was well worth looking at as now you can work out when you want to retire on private pensions, and if you will have a full state pension by then, plus Mr Cheery can now sort out the back payments that HMRC did not like, and get his up to date.

EssexHebridean

Ahh Cheery I’m sorry to hear about Bonny - but echoing the others who’ve reiterated not only that it was the right decision but that clearly you made it at the right time - always the hardest part I think. We don’t want to risk letting them go too soon, but too late is a dreadful idea. Either way it’s never a nice point to reach, and all we can do is the best thing for them. 

The personal inflation thing sounds interesting - although I confess I’m not sure I want to know! 

South_coast

Not heard of that calculator before, might have to have a play later and see what they think I should be spending!

Karmacat

Great work sorting out the pensions - a shame the "authorities" aren't keeping up with you.  I imagine some of that is incompetence, some laziness, and some exactly what you think - purposeful avoidance.  All monoliths are made up of people, and their motives vary   Good luck with it - sorting *your* money that you've paid in.   Their actions shouldn't be depriving you of the results of your work.

Cheery_Daff

Thank you all xxx

I think the calculator was only released very recently, I spotted it in the paper this morning. 

Susie, yes, that was my understanding too. I hope the Future Pensions people would be more useful for other people - maybe in our case it was just obvious whether we should or shouldn't pay back?? 

Anyway, HMRC again on Tuesday I think... I think I'll take my chances with mine - 25 years is a long time for things to change anyway, but Mr Cheery only has 7 years left so definitely need to sort his out.

South_coast

Cheery_Daff said
....and diesel is 178% more (!!)

Snap 🤣🤦‍♀️! 


Mine is 10.7% apparently. Not sure about that 🤔?

themadvix

Ours was 7.6% - we don’t spend a lot on fuel though and food has been kept down by allotment and Olio, so that helps (and was also a guess as I don’t keep that close an eye - please don’t kick me out!). The amounts it thought people on our income would spend on clothes and eating out was eye opening though! If they spend all of those categories on top of a mortgage twice the size of ours, no wonder the country is in the mess it is, no one can have any savings!