Guide discussion: Voluntary national insurance contributions

Dazed_and_C0nfused

It's because you are under transitional rules.

The standard basic State Pension is ~£142 so you're well ahead of that, presumably from post 2016 years.

Pre 2016 years are highly unlikely to add to your entitlement.

Do you have any post 2016 years available to buy?  2020:21 doesn't count as it's the year you reached SPa.

Overall you're a big winner under the new system but it might be there simply wasn't quite enough time for you to increase your expected pension from ~£142 to £185

p00hsticks

Frozen_Out said:

Can anyone please explain why I am getting less than the 'Standard New State Pension amount', and whether there is anything that I can now do about it?

I remember getting a letter from DWP, many years ago, saying I would need 30 years NI contributions to get 'a full pension'. Yet with 45 years, it seems I still don't!

I am currently receiving £169.59 per week and struggling to understand why I don't seem to get the 'Standard Pension amount' of £185.15 (I am £15.56 per week short).

That pre-2016 'full pension' that you only needed 30 years for is now known as the basic state pension and, as Dazed says, is currently worth £142..
 https://www.gov.uk/state-pension

 When the new State Pension was introduced in April 2016, everyone's entitlement under both the old and new rules was calculated and the higher of the two amounts was taken as your 'starting amount'.

Your starting amount was obviously that under the old rules - probably because you had been contracted out for many years prior to 2016 and so paid a lower rate of NI (the new rules calculation includes an adjustment to take account of that).

 Every NI year accumulated since then adds £5.29 (in todays terms) to a persons starting amount until the maximum £185.15 or State Pension Age is reached, whichever is sooner. In your case you simply didn't have enough years after 2016 to boost your starting amount up to the maximum.

 But you are still a winner under the new system, as you have had the opportunity to unexpectedly increase the pension amount you would have been expecting for the majority of your working life by around £20 in the last four years.

 I'm afraid that in your particular case filling pre-2016 gaps in your NI record won't increase your pension amount further - only post-2016 years would do that.

Gollygumdrops

Well after all the debacle of the past month or so trying to get through on the phones to check my NI Contributions and Voluntary Contributions needed, now I cannot access the online Gov.UK  site to check what years I have to pay!  Yesterday was the same.  What is wrong with this department?  How can they be so appalling at answering phones and now have their website, which at least helped us see what years were outstanding, not working?  Absolutely abysmal service.
My only option now then is to try to get through on the phone and,  if I am lucky enough not to be cut off,  wait at least an hour or so for someone to answer. 
Is anyone else having problems accessing these pages on the website?

molerat

GG working fine for me.

The " debacle" is down to people leaving everything to the last minute egged on by TV coverage. 

There are people who have been retired several years and after watching ML on TV are now trying to increase their pensions and phoning up whether there is any chance of that happening or not.  The time to have done that was before SRA.

People ringing up because they have a single gap in their record with 20+ years to go.

We knew there would be a bit of a panic so sorted SIL's out last year - she retires Sept this year.

It would be impossible to get a working system and enough trained staff in place to cover this once in a lifetime situation

Gollygumdrops

Thanks for your reply molerat.  I am not in the situations you mention but am due to retire in the next 3 years so need to address the situation, if I want a better pension.  
I remember having to phone them about 4/5 years ago for an estimate and I never waited on the phone more than 10 minutes and was never cut off, like happens all the time recently.  
Trying to access my records online now shows “Sorry, there is a problem with the service”.  
I appreciate that they may be busier than usual but I cannot understand, with all the money they receive from taxpayers, why they couldn’t employ more people to help out at this time.  
Perhaps our government should put the money towards helping the people who have paid into the system rather than bending over backwards to help those who have contributed nothing? Just saying what many people are thinking. 

p00hsticks

Gollygumdrops said:

I appreciate that they may be busier than usual but I cannot understand, with all the money they receive from taxpayers, why they couldn’t employ more people to help out at this time. Perhaps our government should put the money towards helping the people who have paid into the system 

This level of demand for both the Future Pensions Service and the HMRC NI Enquiries line is absolutely unprecedented and a once-in-a-lifetime surge that is only going to last a few months.

 It simply isn't realistic to expect these organisations to spend vast quantities of taxpayer money recruiting and training up hundreds of additional staff and providing the extra call centre infrastructure for them to work in, simply because suddenly there are a load of people who for whatever reason haven't made the effort to address their personal circumstances ages ago and now suddenly now want immediate access to a service that has been functioning perfectly well for many years.

Frozen_Out

Thanks very much for the explanations.

That is far more helpful than anything the Pension Service have ever told me.

Rather dissapointing that they don't explain things as well!

I don't have any post 2016 years to buy unfortunately, only pre, which it seems wouldn't help.

So, presumably, had I reached SPA 4 years later, I would have got the 'full new amount'? (Or, if I could buy more years post 2016?).

Regarding my 'starting amount', was that then £142?

The same amount as I would have got under the old system (Basic State Pension).

Which was then 'topped up' by my 4 years NI since 2016?

And when my entitlement under both rule systems was calculated, I would have got LESS under the new system?

I suppose that the calculation has to take account, somehow, of the unpaid NI due to contracting out over the years. And that, presumably, is related to the 'COPE' amount?

But, it sounds like this shortfall would have been ignored had I reached SPA 4 year later?

Perhaps this is due to the 'transitional arrangements', in which it tapers back up to the 'full amount'?

But it still seems bizarre that I am seemingly 4 years short of contributions, with no means to correct that, and when I have 45 full years!

molerat

In April 2016 2 calculations were carried out using the new and old new pension schemes.  The new scheme used 35 years at £4.45 and deducted the COPE so in your case £155.65 - £73.27 = £82.38.  The old scheme used 30 years at £3.98 and added S2P which included a deduction for contracting out so in your case £119.30 + £5.50 = £124.80.  The old scheme came out highest.  You could then add to that amount with post 2016 contributions.  That £124.80 uprated by the triple lock is now £148.43 plus 4 years at £5.29 is £169.59.  If you had more years post 2016 until you retired you would have been able to add more £5.29s, in your case another 3 would be needed.  If the old scheme had carried on you would have only been adding relatively small amounts of S2P and unlikely got anywhere near your current amount.

chels

Popping back in here to say thank you for the helpful information on this thread (and others) and the direct replies to my queries from molerat. 

I paid 10 years of voluntary NICs on 7.02.23 and have been checking my record weekly for the last few weeks and today it's showing my record has been updated so approx 7 weeks to be updated (not bad!), all correct in terms of the years I requested and the new weekly amount.

Just have to wait 10 years to get my state pension now lol, I won't be wishing my life away to get it but it's nice to know it's dealt with and I can forget about it till it's due.

Frozen_Out

Thanks very much for the detailed explanation 'molerat'.

It's reassuring to see the calculation, and have assurance that it's been done correctly! And nice to know that I seem to be 'a winner' under this system.

I wish the Pension Service had told me all this.

I had, until recently, thought that I was getting the 'full pension amount' (based on the limited information that I had). But, clearly, it's a bit more complicated than that!

I happened to notice the 'full state pension' amount of c.£185 being mentioned in the news (and by MSE), and wondered what had gone wrong!

At least that makes more sense to me now.

Another curious mystery though:

I happen to have a relative who is 8 days younger than me and, generally, in a similar situation (i.e. contracted out for some years, same retirement date). But he is, apparently, getting about £35 a week (SP) more than I am (so even more than the £185 'full amount'!).

Does that make any sense?

He must have contracted out / back in at different times to me, but could that have made that much difference?