State Pension - Am I Being "Stiffed"?

calcotti

Nightowl4933 said: I did look at the way the government calculates the state pension and it seems (although I'll need to read it again) that I need 35 qualifying years to get the full new State Pension, which I have, and is the reason for my question.

That it wasn’t what it says. You are guaranteed to get the full new state pension if you have 35 years of NI contributions from 2016 onwards. If your NI history is from before 2016 then transitional arrangements apply (which obviously applies for everybody at the moment). You need to read the information again.

Dazed_and_C0nfused

[Deleted User] said:

Albermarle said:

To put the £1620 in context, it would cost you at least ten times that amount to buy the same amount of pension as an annuity. Six months ago it would have cost more like fifteen times.
In other words it is a bargain.

No, I get that.  I did look at the way the government calculates the state pension and it seems (although I'll need to read it again) that I need 35 qualifying years to get the full new State Pension, which I have, and is the reason for my question.

No idea how you have managed to think you need 35 years???

Have you read the proper government site?

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

[Deleted User]

Dazed_and_C0nfused said:

Nightowl4933 said:

Albermarle said:

To put the £1620 in context, it would cost you at least ten times that amount to buy the same amount of pension as an annuity. Six months ago it would have cost more like fifteen times.
In other words it is a bargain.

No, I get that.  I did look at the way the government calculates the state pension and it seems (although I'll need to read it again) that I need 35 qualifying years to get the full new State Pension, which I have, and is the reason for my question.

No idea how you have managed to think you need 35 years???

Have you read the proper government site?

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

I got it from The new State Pension: How it's calculated - GOV.UK (www.gov.uk) site, about half way down - but I did say I'll need to read it properly, as has been pointed out to me!

Now I understand, thank you @calcotti :-)

dunstonh

According to the government's website, I've paid 46 years of full contributions up to 2018, but I haven't paid contributions since then as I ran my own business and didn't take a salary (although I did take dividends).

That was a big mistake.    I am surprised your accountant let you get away with that without raising it.  Its a potentially a missale.

You chose to save tax by not taking a salary. 

It didn't actually save tax.   The accountant should have recommended up to the primary threshold as the salary and dividends on top.   Some recommend to the personal allowance with dividends on top but its effectively a similar outcome (and will be from now on).

I got it from The new State Pension: How it's calculated - GOV.UK (www.gov.uk) site, about half way down - but I did say I'll need to read it properly :-)

That's about the new state pension for people who will have their whole life under the new system.  You straddle multiple methods.

p00hsticks

Nightowl4933 said:

Dazed_and_C0nfused said:

Nightowl4933 said:

Albermarle said:

To put the £1620 in context, it would cost you at least ten times that amount to buy the same amount of pension as an annuity. Six months ago it would have cost more like fifteen times.
In other words it is a bargain.

No, I get that.  I did look at the way the government calculates the state pension and it seems (although I'll need to read it again) that I need 35 qualifying years to get the full new State Pension, which I have, and is the reason for my question.

No idea how you have managed to think you need 35 years???

Have you read the proper government site?

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

I got it from The new State Pension: How it's calculated - GOV.UK (www.gov.uk) site, about half way down - but I did say I'll need to read it properly, as has been pointed out to me!

That statement appears under the heading

You did not make National Insurance contributions or get National Insurance credits before 6 April 2016

so is not applicable in your case

Dazed_and_C0nfused

[Deleted User] said:

Dazed_and_C0nfused said:

[Deleted User] said:

Albermarle said:

To put the £1620 in context, it would cost you at least ten times that amount to buy the same amount of pension as an annuity. Six months ago it would have cost more like fifteen times.
In other words it is a bargain.

No, I get that.  I did look at the way the government calculates the state pension and it seems (although I'll need to read it again) that I need 35 qualifying years to get the full new State Pension, which I have, and is the reason for my question.

No idea how you have managed to think you need 35 years???

Have you read the proper government site?

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

I got it from The new State Pension: How it's calculated - GOV.UK (www.gov.uk) site, about half way down - but I did say I'll need to read it properly, as has been pointed out to me!

Now I understand, thank you @calcotti :-)

You seem to be selective in your reading!

You did not make National Insurance contributions or get National Insurance credits before 6 April 2016

Your State Pension will be calculated entirely under the new State Pension rules.

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension.

You’ll need 35 qualifying years to get the full new State Pension.

[Deleted User]

Yep, I now realise I was looking at the new pension arrangements.  Not selective, just in the wrong place, really :-)

What might have a slight bearing on this discussion is that it was suggested I didn't take a salary, as I was already receiving my workplace pension.

Wouldn't it be the case that, as I was earning under the threshold for NI contributions, I wouldn't need to pay them?

Dazed_and_C0nfused

[Deleted User] said:

Yep, I now realise I was looking at the new pension arrangements.  Not selective, just in the wrong place, really :-)

What might have a slight bearing on this discussion is that it was suggested I didn't take a salary, as I was already receiving my workplace pension.

Wouldn't it be the case that, as I was earning under the threshold for NI contributions, I wouldn't need to pay them?

You don't need to pay NI to get a qualifying year.  You need to earn above the lower earnings limit.

What did you engage your accountant to do?

It seems a basic error to not be accruing additional qualifying years when they are going to add value to your State Pension bit maybe that wasn't part of their remit?

molerat

If you had no earned income then you would not be required to make NI contributions.  There are clever ways of taking an income to receive NI credits without paying for them then paying that income into a pension to recoup any tax paid but that ship has sailed.

Dazed_and_C0nfused

molerat said:

If you had no earned income then you would not be required to make NI contributions.  There are clever ways of taking an income to receive NI credits without paying for them then paying that income into a pension to recoup any tax paid but that ship has sailed.

Or even getting tax relief when no tax had even been paid!!