Never ending national insurance payments

SusieT

I have (finally) got my state pension topped up, so that when the remaining tax years are processed it will pay the maximum.  I was contracted out for a fair while, so am paying more years, but it is well worth it. 
The COPE part will be paid as part of your private pension, as that was where the payments went while you were contracted out.  Its a shame the website does not filter people out  according to them getting the old or new pension, and give the information only for that pension, as it does confuse a lot of people the way it is at the moment.

michaels

I had my full SP entitlement at 50 so any NI have paid since (lets call it at least £5k per year or a lifetime of class 2) then gets me precisely zero more pension - and I thought I was doing the 'safe' option not opting out of serps

squirrelpie

michaels said:

I had my full SP entitlement at 50 so any NI have paid since (lets call it at least £5k per year or a lifetime of class 2) then gets me precisely zero more pension - and I thought I was doing the 'safe' option not opting out of serps

https://www.bbc.co.uk/news/newsbeat-10078062
https://www.gov.uk/national-insurance/what-national-insurance-is-for

michaels

squirrelpie said:

michaels said:

I had my full SP entitlement at 50 so any NI have paid since (lets call it at least £5k per year or a lifetime of class 2) then gets me precisely zero more pension - and I thought I was doing the 'safe' option not opting out of serps

https://www.bbc.co.uk/news/newsbeat-10078062
https://www.gov.uk/national-insurance/what-national-insurance-is-for

Had I opted out of SERPS the NI I am now paying would mean I still end up with the same state pension and I would have a nice additional pension pot.  So those who have paid less NI than me over the years and will now be getting pension for the NI they are paying where I have already paid in more and am getting no further personal pension benefit from payments I am making now.

Perhaps you can see some way in which that is fair but it is beyond me.

Thrugelmir

bostonerimus said:

I've been paying voluntary Class 2 NI for most of my working life and started out needing 30 years of contributions for the full state pension, then the number was raised to 35 years. My forecast is for 179.60/week and I'm now at 37 years and I keep contributing just incase Rishi moves the goal on me again.

Are you entitled to both the US and UK state pensions? 

eskbanker

michaels said:

Had I opted out of SERPS the NI I am now paying would mean I still end up with the same state pension and I would have a nice additional pension pot.  So those who have paid less NI than me over the years and will now be getting pension for the NI they are paying where I have already paid in more and am getting no further personal pension benefit from payments I am making now.

Perhaps you can see some way in which that is fair but it is beyond me.

But the whole system is full of inherent unfairness, not least from the fact that (ignoring historical SERPS issues), the current mechanism has no correlation between amount of NI paid in each qualifying year and pension paid out later on, i.e. someone on a massive wage paying in many thousands in NI will receive exactly the same benefit as someone paying far less, or even paying nothing under some circumstances.  The disparity between different classes of NI contributions is discussed on numerous other threads, so we're well beyond the situation where fairness can be achieved without major reconstruction, and given the 2016 recast, it's unlikely to happen in the foreseeable future, even if someone came up with a model that could genuinely be described as fair....

QrizB

michaels said:

I had my full SP entitlement at 50 so any NI have paid since (lets call it at least £5k per year or a lifetime of class 2) then gets me precisely zero more pension - and I thought I was doing the 'safe' option not opting out of serps

The Pensions forum is full of threads where people have played it safe and ended up with less than if they'd taken a risk.

bostonerimus

NI is not a SIPP or a DB plan and you don't necessarily get more if you pay more in. It's national insurance and meant to provide a safety net and goes on many things in addition to SP. It's riddled with unfairness and inequity and there are many groups who have claims about it's poor workings. 

bostonerimus

Thrugelmir said:

bostonerimus said:

I've been paying voluntary Class 2 NI for most of my working life and started out needing 30 years of contributions for the full state pension, then the number was raised to 35 years. My forecast is for 179.60/week and I'm now at 37 years and I keep contributing just incase Rishi moves the goal on me again.

Are you entitled to both the US and UK state pensions? 

Yes, I can start US SS at 62 although I'll probably just take it at 65 when my Medicare starts. My UK SP will start at 67.

Thrugelmir

bostonerimus said:

Thrugelmir said:

bostonerimus said:

I've been paying voluntary Class 2 NI for most of my working life and started out needing 30 years of contributions for the full state pension, then the number was raised to 35 years. My forecast is for 179.60/week and I'm now at 37 years and I keep contributing just incase Rishi moves the goal on me again.

Are you entitled to both the US and UK state pensions? 

Yes, I can start US SS at 62 although I'll probably just take it at 65 when my Medicare starts. My UK SP will start at 67.

Surprised that you claim both. A flaw in both the US and UK systems.