Guide discussion: Voluntary national insurance contributions

molerat

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

Dodge1664

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

thanks again. Could you explain what the "uprate" is, and where the £4.45 and £3.98 came from?

molerat

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

thanks again. Could you explain what the "uprate" is, and where the £4.45 and £3.98 came from?

The uprate is the annual inflation increase to the pension.  Those amounts are the old and new pensions at 2016, £119.30 / 30 and £155.65 / 35.

Once you get your head round the concept of how it all works it is just maths.  I had to do it for myself and other family members and got fed up scribbling numbers and punching a calculator so wrote a spreadsheet with all the calculations, fill in the basics - the figures we ask you for - and it shows the effect of adding years one at a time.

windward10

molerat said:

How are those full years split pre and post 2016 ?

You are 8 years short of the max amount.  It is unlikely that pre 2016 years will be useable - answer to above will confirm.

So it looks like there are 5 available years post 2016 which will take you to £169.29

Any gap years whilst self employed should be payable at class 2 rates, £163.80 per year, so well worth doing.

The big problem is going to be speaking to someone as those years with no detail will be self employed and no contributions, messes the system up.

Thanks @ molerat

Up to 2006-7 were full, 2012-13, 2013-14 and 2014-15 were also full. There were no full years after 2016.

I spoke to our accountant and he didn't know why we hadn't paid any NI ( I would have expected him to have told me??).

If I understand you correctly and I can pay the 5 years at £163.80 that would give me an increase of £26.45 pw (£1375.40 PA) so I would win over the year.

It looks as if I will have to wait until they get around to sending me the detail letter and miss the deadline. I have tried speaking to a number of State Pension Advisors and they have all told me something different. The last said that if I wanted to pay the amount per year would increase after 6th April and it would take a year before it would add to my pension.

molerat

windward10 said:

molerat said:

How are those full years split pre and post 2016 ?

You are 8 years short of the max amount.  It is unlikely that pre 2016 years will be useable - answer to above will confirm.

So it looks like there are 5 available years post 2016 which will take you to £169.29

Any gap years whilst self employed should be payable at class 2 rates, £163.80 per year, so well worth doing.

The big problem is going to be speaking to someone as those years with no detail will be self employed and no contributions, messes the system up.

Thanks @ molerat

Up to 2006-7 were full, 2012-13, 2013-14 and 2014-15 were also full. There were no full years after 2016.

I spoke to our accountant and he didn't know why we hadn't paid any NI ( I would have expected him to have told me??).

If I understand you correctly and I can pay the 5 years at £163.80 that would give me an increase of £26.45 pw (£1375.40 PA) so I would win over the year.

It looks as if I will have to wait until they get around to sending me the detail letter and miss the deadline. I have tried speaking to a number of State Pension Advisors and they have all told me something different. The last said that if I wanted to pay the amount per year would increase after 6th April and it would take a year before it would add to my pension.

If all your 39 filled years are pre 2016 then there is absolutely no value in adding more pre 2016 years, they cannot add to the pension.

I believe there was a change in how class 2 was paid and quite a few seem to have missed it.

Once you have paid your pension should be increased and backdated to the date of receipt of the payment.

Dodge1664

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

thanks again. Could you explain what the "uprate" is, and where the £4.45 and £3.98 came from?

The uprate is the annual inflation increase to the pension.  Those amounts are the old and new pensions at 2016, £119.30 / 30 and £155.65 / 35.

Once you get your head round the concept of how it all works it is just maths.  I had to do it for myself and other family members and got fed up scribbling numbers and punching a calculator so wrote a spreadsheet with all the calculations, fill in the basics - the figures we ask you for - and it shows the effect of adding years one at a time.

thanks. Any chance I could have a copy of your spreadsheet? or perhaps not if it includes personal information. I am starting to wonder if class 3 contributions are really worthwhile for someone of my age (52). It might be better to invest the money instead.

Dazed_and_C0nfused

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

thanks again. Could you explain what the "uprate" is, and where the £4.45 and £3.98 came from?

The uprate is the annual inflation increase to the pension.  Those amounts are the old and new pensions at 2016, £119.30 / 30 and £155.65 / 35.

Once you get your head round the concept of how it all works it is just maths.  I had to do it for myself and other family members and got fed up scribbling numbers and punching a calculator so wrote a spreadsheet with all the calculations, fill in the basics - the figures we ask you for - and it shows the effect of adding years one at a time.

thanks. Any chance I could have a copy of your spreadsheet? or perhaps not if it includes personal information. I am starting to wonder if class 3 contributions are really worthwhile for someone of my age (52). It might be better to invest the money instead.

The typical years Class 3 NI will cost ~£800.  As a one off payment.

And add £275/year to your State Pension.  Every year from SPA for the rest of your life.

And be increased by some form of inflation protection.  For example this year's £275 will be worth £302 next month.

Not sure how you will get the same return by investing ~£800 elsewhere but I'm sure people would like to know!

p00hsticks

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

molerat said:

Dodge1664 said:

Hi,

I'd be most grateful if one of the resident experts could comment on my situation.

NI record
========
15 years of contributions
15 years to contribute
9 years of contributions were before April 2016
COPE estimate is £1.28 a week.
Worked in UK private sector for 6 years before April 2016.
8 years between 2008 and 2016 not full.

State Pension Forecast
=====================
estimate based in existing record                £79.73 a week
forecast if I contribute up until 5 April 2037 £159.08 a week
most I can increase forecast to is                £185.15 a week

Questions
==========
1. how many years should I fill in so that I can still reach the maximum, assuming I contribute for the remaining 15 years? I think probably 5, as I would then have 35 years. Is there any way these pre-2016 years might not count? I ask because the MSE article mentions that its possible that they might not count.

2. How is the estimate based on existing record calculated? £185.15x15/35=£79.35. They have £79.73. Why the small discrepancy?

3. Why the discrepancy with forecast based on continued contributions? £185.15x30/35=£158.70. They have £159.08.

thanks, Dodge

You need 20 years more to reach the max (at £5.29).  You have 15 years left going forward taking you to £159.08 and by adding 6 past years gets you to £185.15.  With only 9 pre 2016 years you are safe to fill as many as are available but using any pre 2016 years will give an overall lower outcome than post 2016 years.  35 years is not relevant to you as you are a transitional rules pensioner.  If you were to fill up with 8 pre 2016 years and 12 post 2016 you would be £1.51 short so needing another 1 to reach the max.  To reach the max in 20 they all need to be post 2016 which cannot be done with your record, you will have to take the small hit or buy a 21st year for the extra small amount. As said somewhere in another post, the reasons are "because it is complicated"

You current amount is based on your pre 2016 history where a line was drawn plus what you have earned since 2016.  Your starting amount was the higher of 9 years old basic plus S2P or 9 years new minus COPE.  The old calculation was the higher at £40.35 against £38.79 new meaning any pre 2016 years only add £4.73 (at current rate) until you add 4 when the new rate takes over - "it's complicated"

thanks molerat. Clearly, I haven't understood this properly. As its not possible to get through to an advisor on the phone, I'll have to get my head around it, even if it is "complicated". How did you derive the figures £40.35 and £38.79 above? Sounds like I'd be best off paying for 5 pre 2016 years, contributing another 15 new years, and accepting a slightly decreased pension. The 6th pre 2016 contribution would be mostly wasted.

It is fairly straightforward maths.  Take your current amount.  Deduct post 2016 years at £5.29 each.  That leaves the 2016 starting amount including each year's uprate.  Strip that uprate out which leaves the starting amount.  The starting amount is either the pre 2016 years multiplied by £4.45 minus COPE (which is a set 2016 figure, it is only used in the 2016 calculation)  or pre 2016 years multiplied by £3.98 plus S2P.  The S2P is not shown but if the calculated starting amount is not the new figure it must be the old and the S2P can be assumed as you know the basic pension for the amount of years. The only thing the advisor can see that is different to what is shown on the forecast is the actual S2P amount, the starting amount and which value the starting amount is based on.

That is why some specific information is requested so we can help.

Th only problem you have years wise is whatever you do you are needing to contribute pretty much right up to state pension age, very little flex available.

thanks again. Could you explain what the "uprate" is, and where the £4.45 and £3.98 came from?

The uprate is the annual inflation increase to the pension.  Those amounts are the old and new pensions at 2016, £119.30 / 30 and £155.65 / 35.

Once you get your head round the concept of how it all works it is just maths.  I had to do it for myself and other family members and got fed up scribbling numbers and punching a calculator so wrote a spreadsheet with all the calculations, fill in the basics - the figures we ask you for - and it shows the effect of adding years one at a time.

. I am starting to wonder if class 3 contributions are really worthwhile for someone of my age (52). It might be better to invest the money instead.

Providing you correctly identify the years that will actually increase your forecast and that you actually live to beyond the age of 70+, it is extremely unlikely that you will get a better return from investing the money yourself. Buying years is incredibly good value for money. 

JAG

Could someone please confirm I am understanding correctly the Valuing of your National Insurance contributions and credits made before 6 April 2016 if part of the old state pension scheme (with no Additional State Pension) requiring 30 years contributions.

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

It will be whichever of the two calculations A or B below is the highest.

A. The amount you would get under the old State Pension rules (which includes basic State Pension & Additional State Pension)

B. The amount you would get if the new State Pension had been in place at the start of your working life

A.

So if you had 10 years of NI contributions for basic State Pension then the starting amount would be £47.30.

£4.73 for each year.

Calculated by using the full state pension of £141.85 divided by 30 (30 years NI contributions needed for full pension).

OR

B.

So using the example of 10 years of basic State Pension then the starting amount would be £52.90.

£5.29 for each year.

Calculated by using the full state pension of £185.15 divided by 35 (35 years NI contributions needed for full pension).

So the starting amount for the purpose of valuation of pre 6 April 2016 credits would be B £52.90 because it is the higher of the two amounts.

molerat

JAG said:

Could someone please confirm I am understanding correctly the Valuing of your National Insurance contributions and credits made before 6 April 2016 if part of the old state pension scheme (with no Additional State Pension) requiring 30 years contributions.

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

It will be whichever of the two calculations A or B below is the highest.

A. The amount you would get under the old State Pension rules (which includes basic State Pension & Additional State Pension)

B. The amount you would get if the new State Pension had been in place at the start of your working life

A.

So if you had 10 years of NI contributions for basic State Pension then the starting amount would be £47.30.

£4.73 for each year.

Calculated by using the full state pension of £141.85 divided by 30 (30 years NI contributions needed for full pension).

OR

B.

So using the example of 10 years of basic State Pension then the starting amount would be £52.90.

£5.29 for each year.

Calculated by using the full state pension of £185.15 divided by 35 (35 years NI contributions needed for full pension).

So the starting amount for the purpose of valuation of pre 6 April 2016 credits would be B £52.90 because it is the higher of the two amounts.

Pretty much, although it would have been done at 2016 rates - £3.98 & £4.45 - and uprated to today, providing the recipient was only entitled to basic pension with no S2P or contracted out service.