Sorry another state pension question

dogbower

I have planned very poorly for my retirement, however I am trying to get a bit more organised. I expect I will be asking many questions over the next few weeks. Here’s the first concerning my state pension-
I have 23 years of full contributions
12 years to contribute to before 5th April 2034, when I’ll be 66, so I guess that’s the last full tax year before I’m 67? My birthday is in March.
And 16 years when I did not contribute enough, 2 it’s too late to make up the shortfall, the rest, 2006 to 2020, 14 years I can make up at £824.20 per year.
My forecast is
current position £110.99 per week
if I keep contributing till 2034 £174.47
I can pay the shortfalls £185.15.

I believe I need 35 qualifying years for maximum pension, so if I keep working till 67, I’ll have 34? So is there any point paying the shortfalls?
It’s £11538.80, and appears to give be an extra £10 a week.

I am self employed, and plan to stop working full time in 4 years, at this point I won’t draw a pension till I’m 67, and will still do enough/ as little work to enable me to pay my state pension at the lower rate, think it’s £150/ year if you earn less than a grand?
I will be living off savings, I’m sure I’ll have more questions about this part of my plan later.
Sorry for the long post but trying to give as much information as,possible.

tacpot12

Continuing to earn enough to pay the NI (at the self-employed rate) that you need to qualify for a full state pension is a fine idea, and if you can do this to make up the majority of your missing years, this is the cheapest way to do it. 

You would benefit from paying for one missing year now, so that if you work until you are 67 you will have 35 years. You might want to consider paying for few more years now, so that you don't miss out it you have to completely stop  working a few years before you are 66.

I think you need to keep your health under reivew, and if it looks like you might have to stop working earlier than planned, if you can still make up some of the missing years. 

molerat

What date is your current amount up to - Apr 21 or 22 ?

35 years is not relevant to you as you have a pre 2016 history, you have a set figure at April 2016 and you can add to that with post 2016 contributions, it may be the case that you will have paid 35 though.

If you were self employed you may be able to pay those back years at class 2 rates - £163.80 per year, it looks like you will need 2 and it may be worth bagging a few more as insurance for the future, as long as you do some self employed work until state retirement time you will be able to pay those rates for years going forward.

How many pre 2016 years do you have ?

How many post 2016 years do you have ?

Were you ever in a contracted out pension scheme ?

Does your forecast give a COPE amount ?

I can't quite reconcile the numbers you have given.

Linton

35 years is irerelevent for people who have a significant number of years paying pre-2016 NI.  In your case it could be more, the same, or less.

Did you get a forecast from https://www.gov.uk/check-state-pension, if not you should do so.  The information there is definitive.  You may or may not gain anything paying for the years 2006-2016 and in any case the option to pay these ends at the end of the 22/23 tax year when the years fo4r which you can go back reverts to 6 years.  To check whether it is worthwhile you need to talk to The Future Pensions Centre: https://www.gov.uk/future-pension-centre.  

You are correct, you can only usefully pay NI up to the end of the tax year prior to the one when you reach State Pension Age.

Assuming that 35 years with you only getting 34 years in the time available is correct whether it is worth paying for an extra year depends on what it would provide. You cannot get more than the standard rates.   If the gap is £5/week then it is worth paying, if it's 50p/week it may not be(unless you can get it at the minimum self employed rate).  This information is in the State Penion Forecast.  Note that if you intend to pay NI up to the time you reach State Pension Age you will have no spare years to use up so you need to make the decision in the next few years.

dogbower

Thanks for the replies.
I have 21 years pre 2016, and 2 post.
Yes I was in a contracted out scheme, the COPE figure is £26.55 per week. 

Hope that helps.

molerat

To get close to the max you need the 12 going forward plus 2 back years which will bring you to £185.05. If there are any part paid back years it may be worth picking them up.  Pre 2016 years will not add quite as much, £4.73 per year against £5.29 post 2016.