NI contribution to count as a year

meat_n2_reg

Hello

Currently earn approx 15k a year 
Have 34 years Ni contribution currently on year 35 starting April 22
Will be reducing my hours shortly so earning will drop to 10k which is under the ni threshold
Will this year still count as a years Ni contribution?
Thanks 

Jeremy535897

You need to earn the lower earnings limit, currently £123 a week, to have the year count towards your NI record.

Dazed_and_C0nfused

meat_n2_reg said:

Hello

Currently earn approx 15k a year 
Have 34 years Ni contribution currently on year 35 starting April 22
Will be reducing my hours shortly so earning will drop to 10k which is under the ni threshold
Will this year still count as a years Ni contribution?
Thanks 

And having 35 years does not guarantee you the standard new State Pension, those rules are only for people starting to pay NI from 2016.

You are under transitional rules so having 35 years is irrelevant.  Have you checked your State Pension forecast on gov.uk, ensuing you ready he whole thing not just the headline figure?

If you do need 35 years it is a complete coincidence.

Dazed_and_C0nfused

In fact it looks like this was explained a while back,

https://forums.moneysavingexpert.com/discussion/6209368/state-pension-and-ni-contribution-years

Flugelhorn

I have a year that is showing  as full even though I only worked for a month then retired 

SiliconChip

Dazed_and_C0nfused said:

meat_n2_reg said:

Hello

Currently earn approx 15k a year 
Have 34 years Ni contribution currently on year 35 starting April 22
Will be reducing my hours shortly so earning will drop to 10k which is under the ni threshold
Will this year still count as a years Ni contribution?
Thanks 

And having 35 years does not guarantee you the standard new State Pension, those rules are only for people starting to pay NI from 2016.

You are under transitional rules so having 35 years is irrelevant.  Have you checked your State Pension forecast on gov.uk, ensuing you ready he whole thing not just the headline figure?

If you do need 35 years it is a complete coincidence.

I'm a bit surprised because I normally expect your replies to be pretty accurate, but you seem to have completely misunderstood how new state pension works. The 2016 rule applies to reaching state penion age, when you started paying NI is irrelevant.

Eligibility

You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951
• a woman born on or after 6 April 1953

The earliest you can get the new State Pension is when you reach State Pension age.

If you reached State Pension age before 6 April 2016, these rules do not apply. Instead, you’ll get the basic State Pension.

Valuing your National Insurance contributions and credits made before 6 April 2016

Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension.

Your starting amount will be the higher of either:

• the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension)
• the amount you would get if the new State Pension had been in place at the start of your working life

Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

If your starting amount is less than the full new State Pension

You can get more State Pension by adding more qualifying years to your National Insurance record after 5 April 2016. You can do this until you reach the full new State Pension amount or reach State Pension age - whichever is first.

Each qualifying year on your National Insurance record after 5 April 2016 will add about £5.29 a week to your new State Pension. The exact amount you get is calculated by dividing £185.15 by 35 and then multiplying by the number of qualifying years after 5 April 2016.

https://www.gov.uk/new-state-pension

SiliconChip

Flugelhorn said:

I have a year that is showing  as full even though I only worked for a month then retired 

I agree, I have several years showing as full in my record even though I didn't make contributions for part of that period. As I understand it there is a component to making a qualifying year that includes how much in total you've paid in that year as well as how many contributions you made, I think I once saw the rules on here but that was a long time ago. I'm slightly surprised that only contributing for 1 month allows you to qualify but I'm sure there couldn't possibly be an error in any government record

Dazed_and_C0nfused

SiliconChip said:

Dazed_and_C0nfused said:

meat_n2_reg said:

Hello

Currently earn approx 15k a year 
Have 34 years Ni contribution currently on year 35 starting April 22
Will be reducing my hours shortly so earning will drop to 10k which is under the ni threshold
Will this year still count as a years Ni contribution?
Thanks 

And having 35 years does not guarantee you the standard new State Pension, those rules are only for people starting to pay NI from 2016.

You are under transitional rules so having 35 years is irrelevant.  Have you checked your State Pension forecast on gov.uk, ensuing you ready he whole thing not just the headline figure?

If you do need 35 years it is a complete coincidence.

I'm a bit surprised because I normally expect your replies to be pretty accurate, but you seem to have completely misunderstood how new state pension works. The 2016 rule applies to reaching state penion age, when you started paying NI is irrelevant.

Eligibility

You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951
• a woman born on or after 6 April 1953

The earliest you can get the new State Pension is when you reach State Pension age.

If you reached State Pension age before 6 April 2016, these rules do not apply. Instead, you’ll get the basic State Pension.

Valuing your National Insurance contributions and credits made before 6 April 2016

Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This is part of your new State Pension.

Your starting amount will be the higher of either:

• the amount you would get under the old State Pension rules (which includes basic State Pension and Additional State Pension)
• the amount you would get if the new State Pension had been in place at the start of your working life

Your starting amount will include a deduction if you were contracted out of the Additional State Pension. You may have been contracted out because you were in a certain type of workplace, personal or stakeholder pension.

If your starting amount is less than the full new State Pension

You can get more State Pension by adding more qualifying years to your National Insurance record after 5 April 2016. You can do this until you reach the full new State Pension amount or reach State Pension age - whichever is first.

Each qualifying year on your National Insurance record after 5 April 2016 will add about £5.29 a week to your new State Pension. The exact amount you get is calculated by dividing £185.15 by 35 and then multiplying by the number of qualifying years after 5 April 2016.

https://www.gov.uk/new-state-pension

Possibly badly worded (by me) but the need for 35 years is only relevant to those starting to pay NI from 2016.

Everyone who has already been paying NI will still (with sufficient qualifying years) be eligible for the new State Pension but the amount they get will be based on their starting amount plus any additional qualifying years.

So for next 30 years or so simply having 35 years doesn't guarantee anything, it's more complicated than that 🙂

p00hsticks

SiliconChip said:

Dazed_and_C0nfused said:

meat_n2_reg said:

Hello

Currently earn approx 15k a year 
Have 34 years Ni contribution currently on year 35 starting April 22
Will be reducing my hours shortly so earning will drop to 10k which is under the ni threshold
Will this year still count as a years Ni contribution?
Thanks 

And having 35 years does not guarantee you the standard new State Pension, those rules are only for people starting to pay NI from 2016.

You are under transitional rules so having 35 years is irrelevant.  Have you checked your State Pension forecast on gov.uk, ensuing you ready he whole thing not just the headline figure?

If you do need 35 years it is a complete coincidence.

I'm a bit surprised because I normally expect your replies to be pretty accurate, but you seem to have completely misunderstood how new state pension works. The 2016 rule applies to reaching state penion age, when you started paying NI is irrelevant.

I think it;s you who have misunderstood or mis-read Dazed and Confused's response.

They were correctly pointing out that, if you started paying NI before 2016 you fall under transitional rules and may need more or less than 35 years NI to reach the maximum new State Pension depending on your personal NI record (whether you were contracted in or out, what SERPS/S2P you;ve earned etc). The text you yourself posted talks about how everyones 'starting amount' was calculated, and it;s that that will detemine how many additional years people need to reach the maximum (I fo example, am going to need 44).

For anyone who started their working lives after the introduction of the nSP it;s simpler - every year adds 1/35the of the amount to your pension (although you need at least ten to get anything)