NI Contributions

Hugeass304

Following Martin's MSE email this morning I decided to check my national insurance record and state pension prediction. It says that I'm entiteled to the full pension and cannot improve on the situation which is good. On checking my NI record it says that I have full years in every year except one since 1980. However when I click the view button for individual years it says I didn't make any contributions for this particular year, which is correct as I only work 13 hours a week and have done for several years. So I suppose my question is why does it say "full year" when I didn't contribute anything?
It says I have 41 full years but I haven't contributed anything since 2011/12

Many thanks

p00hsticks

Presumably you were earning enough each week to reach the Lower Earnings Limit where you get creditted with NI contributions, but not enough to reach the Primary Threshold wheer you actually start paying NI (the former is a lower figure than the latter - £123 and £190 weekly for the current year).

Hugeass304

Thank you very much. My P60 for last year says:
Earnings at LEL - £6240
Earnings above LEL - £1452

Many thanks

annemw01

I retired aged 61 at the end of 2018.  I receive my state pension in November 2023.  On checking my forecast it tells me that I have 45 years of full contributions.  However, instead of receiving £185.15 per week I am forecast to have £176.43 per week.  I worked in Higher Education and then the NHS so I may have had some years contracted out but if it's telling me I have 45 full years contrbutions why don't I get the full amount?

molerat

annemw01 said:

I retired aged 61 at the end of 2018.  I receive my state pension in November 2023.  On checking my forecast it tells me that I have 45 years of full contributions.  However, instead of receiving £185.15 per week I am forecast to have £176.43 per week.  I worked in Higher Education and then the NHS so I may have had some years contracted out but if it's telling me I have 45 full years contrbutions why don't I get the full amount?

The much vaunted 35 years figure is only for those starting out after 2016.  Those with a prior record are on a hybrid scheme receiving the higher of the new or old scheme calculations as their starting amount in April 2016.  At April 2016 that a starting amount of no less than you had accrued under the old system with the opportunity to make up with post 2016 contributions.  What exactly does your forecast show as it is very important to understand precisely what the 2 or 3 figures quoted actually mean.

p00hsticks

annemw01 said:

I retired aged 61 at the end of 2018.  I receive my state pension in November 2023.  On checking my forecast it tells me that I have 45 years of full contributions.  However, instead of receiving £185.15 per week I am forecast to have £176.43 per week.  I worked in Higher Education and then the NHS so I may have had some years contracted out but if it's telling me I have 45 full years contrbutions why don't I get the full amount?

The subject of many previous discussions on this board.

You may have 45 'full' years of contributions (in that you have 52 weeks creditted for each year) but many / most of those years will have been at the lower 'contracted out' rate of NI.

When the new State Pension was introduced in 2016 individual calculations were done for everyone under both the old and new scheme rules and the higher amount became an individuals 'starting amount'. With your work history your starting amount would almost certainly hav been that from the old scheme, whcih would have given you the full old basic rate of (in todays terms) £141.85 a week, plus possibly a little bit extra if you were contracted in at any point.

Every years credits since April 2016 then added 1/35th of the maximum (£5.29) to your starting amount.

In your case as you presumably have gaps in your record for 2019-20 and 2020-21 it's well worth getting credits or making voluntary contributions to take you up to the maximym - check out the MSE guide here

https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions

xylophone

And see

https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet

annemw01

molerat said:

annemw01 said:

I retired aged 61 at the end of 2018.  I receive my state pension in November 2023.  On checking my forecast it tells me that I have 45 years of full contributions.  However, instead of receiving £185.15 per week I am forecast to have £176.43 per week.  I worked in Higher Education and then the NHS so I may have had some years contracted out but if it's telling me I have 45 full years contrbutions why don't I get the full amount?

The much vaunted 35 years figure is only for those starting out after 2016.  Those with a prior record are on a hybrid scheme receiving the higher of the new or old scheme calculations as their starting amount in April 2016.  At April 2016 that a starting amount of no less than you had accrued under the old system with the opportunity to make up with post 2016 contributions.  What exactly does your forecast show as it is very important to understand precisely what the 2 or 3 figures quoted actually mean.

Thank you for your reply.  I now understand that the hybrid system is the reason for what I understood to be an anomaly.  Like a lot of people I assumed that having 45 years full contributions would entitle me to the full state pension.  I have no NI contributions for the past two years as my occupational pension is quite small.  Thanks again for your help!

molerat

If you have post 2016 gaps you can fill them for around £800 per year which will give you up to an extra £5,29 per week, £275 per year, for life.  This is like buying a 30% annuity, something that can only be dreamed of on the open market.  Are you sure you understand what the forecast is telling you as the big top line figure is not necessarily what you will get but what you may get subject to contributing until April 2023.