State Pension help please.

pentsioner

I reached state pension age in September 2019 but did not claim it and still don’t.

 

DWP told me that 2019/2020 is a qualifying year as I paid enough in via my employer before I stopped paying NICs that year and to be careful that I don’t pay for years that I don’t need for a state pension.

 

Pension services state that I have 36 years. The 2019/2020 tax year would make it 37 years. I have tried for months asking Pension Services if the qualifying year 2019/2020 (the year I reached state pension age in the September) should be included in their calculation, but don’t get anywhere. Does anybody know if I can use that 2019/20 year towards an increase in my state pension?

 

Also

 

Pension Services state that I can buy the missing three years 2016/17, 2017/18, 2018/2019 for £800.80 each year  to add £5.13 a week to my state pension for each year bought.

 

 

Pension services have said that I can claim 1 year only of my deferred pension, subject to taxes. As of the beginning of December 2021, they calculated my state pension was £162.43 + £21.30 Extra State Pension = £183.73 per week.

 

Would it make sense to claim back 1 year of the deferred state and lose about £9 a week of that extra pension and instead buy the three years for £2402.40 for an extra £15.39 a week?

Audaxer

I would have thought you could pay the missing years 2016/17, 2017/18 and 2018/19 and claim the full 2 years deferment, which I calculate would take you up to £199.12 per week according to your figures. That takes you up to nearly the maximum plus the additional 2 years deferment by my calculations.

molerat

If you reached SP age in Sept 2019 the 19/20 tax year is not a qualifying year, the tax year in which you reach SP age does not count - feel sorry for those that reach SRA on 4th April, a whole year of contributions and nothing for it.

Years are of no relevance.  You have an accrued amount, whichever is the higher under either the old or new systems, at April 2016 and can add to that with post 2016 years.

Paying for the extra 3 years will add £15.39 to your £162.43 base amount so is well worth doing whatever else you decide to do with the deferred increase, it is like a 30% annuity - where else could you get one of those ? 

There seems to be no information about how purchasing past years post retirement affects back payments and deferred amounts, maybe a question you could ask !

pentsioner

molerat said:

There seems to be no information about how purchasing past years post retirement affects back payments and deferred amounts, maybe a question you could ask !

Does this mean that we can claim our state pension and then pay the missing years later, to increas the pension?

molerat

pentsioner said:

molerat said:

There seems to be no information about how purchasing past years post retirement affects back payments and deferred amounts, maybe a question you could ask !

Does this mean that we can claim our state pension and then pay the missing years later, to increas the pension?

Yes you can and according to the normal 2 year / 6 year payment rules.  The only lack of information is around the start date of the increased entitlement.

Silvertabby

molerat said:

pentsioner said:

molerat said:

There seems to be no information about how purchasing past years post retirement affects back payments and deferred amounts, maybe a question you could ask !

Does this mean that we can claim our state pension and then pay the missing years later, to increas the pension?

Yes you can and according to the normal 2 year / 6 year payment rules.  The only lack of information is around the start date of the increased entitlement.

The increase is paid from the date the voluntary contributions are paid.  ie, not back  dated to SPA/actual payment date.

molerat

Silvertabby said:

The increase is paid from the date the voluntary contributions are paid.  ie, not back  dated to SPA/actual payment date.

Have you seen that in black and white anywhere ?

Silvertabby

molerat said:

Silvertabby said:

The increase is paid from the date the voluntary contributions are paid.  ie, not back  dated to SPA/actual payment date.

Have you seen that in black and white anywhere ?

As told to a friend who rang DWP a little over 12 months after SPA (in response to my nagging).  She was in 2 minds before ringing them, and used this as an excuse not to go ahead.

Dazed_and_C0nfused

This is something DWP could really do with clearing up.

Someone paying voluntary Class 2 NI, who needs the final contribution year to increase their State Pension, and who reaches SPA in say May 2022 won't actually be asked to pay the Class 2 NI for 2021:22 until 31 January 2023, several months after the State Pension comes into payment.

Seems unfair that they wouldn't get the final years contribution to be effective from SPA just because they were paying Class 2 NI and not Class 1?

Silvertabby

Dazed_and_C0nfused said:

This is something DWP could really do with clearing up.

Someone paying voluntary Class 2 NI, who needs the final contribution year to increase their State Pension, and who reaches SPA in say May 2022 won't actually be asked to pay the Class 2 NI for 2021:22 until 31 January 2023, several months after the State Pension comes into payment.

Seems unfair that they wouldn't get the final years contribution to be effective from SPA just because they were paying Class 2 NI and not Class 1?

Different circumstances ?  My friend was looking to pay the 3 years prior to SPA.  

Couldn't the person in your example pay their Class 2s early instead of waiting for the bill?

nigelbb

Dazed_and_C0nfused said:

This is something DWP could really do with clearing up.

Someone paying voluntary Class 2 NI, who needs the final contribution year to increase their State Pension, and who reaches SPA in say May 2022 won't actually be asked to pay the Class 2 NI for 2021:22 until 31 January 2023, several months after the State Pension comes into payment.

Seems unfair that they wouldn't get the final years contribution to be effective from SPA just because they were paying Class 2 NI and not Class 1?

Why do you think that someone paying voluntary Class 2 NI contributions for tax year 2021-22 until 31 January 2023? Some people set up a direct debit to pay weekly throughout the tax year.