Pension & National Insurance Contributions Got me stumped!!

Boxerman66

Having watched the MSE Show on TV last night 25/10/2022, I decided to check the internet for what constitutes full MI contributions. Answer was 35 years from NIDIRECT.gov. 35 years from WWW.gov.uk State Pension and Citizens Advice.org says 44 years. 
Just looked at my pension forecast and it says I have 4 years without contributions. It also says that I do have 42 years of contributions already stacked up.
My question is if I have contributed 12 years more or 7 years more or 2 years less depending on which figure is correct, why do I need to make more contributions to get the full pension when it's time? Am I confused? YES any suggestions or clarity would be appreciated. Thanks.

Dazed_and_C0nfused

If you already have 42:years then you fall under transitional rules so there is no set number of years, it is very specific to you.

Marcon

Boxerman66 said:

Having watched the MSE Show on TV last night 25/10/2022, I decided to check the internet for what constitutes full MI contributions. Answer was 35 years from NIDIRECT.gov. 35 years from WWW.gov.uk State Pension and Citizens Advice.org says 44 years. 
Just looked at my pension forecast and it says I have 4 years without contributions. It also says that I do have 42 years of contributions already stacked up.
My question is if I have contributed 12 years more or 7 years more or 2 years less depending on which figure is correct, why do I need to make more contributions to get the full pension when it's time? Am I confused? YES any suggestions or clarity would be appreciated. Thanks.

Depends on your DOB, because that dictates your State Pension Age, which in turn impacts on the number of years you need. If you've ever been in a pension scheme which was 'contracted out', that too has an impact. See https://www.gov.uk/new-state-pension/how-its-calculated

Merlin139

I have 38 Full years, and require another 3 Full years to get the Full amount of £185.15 (This years rate)

I have another 9 years to make my 3 years worth of contributions.

So I require a total of 41 years.

The 35 years is for people that have made no contributions before 6 April 2016

Anyone with contributions prior to this date fall under the transitional arrangements. 

molerat

Boxerman66 said:

Having watched the MSE Show on TV last night 25/10/2022, I decided to check the internet for what constitutes full MI contributions. Answer was 35 years from NIDIRECT.gov. 35 years from WWW.gov.uk State Pension and Citizens Advice.org says 44 years. 
Just looked at my pension forecast and it says I have 4 years without contributions. It also says that I do have 42 years of contributions already stacked up.
My question is if I have contributed 12 years more or 7 years more or 2 years less depending on which figure is correct, why do I need to make more contributions to get the full pension when it's time? Am I confused? YES any suggestions or clarity would be appreciated. Thanks.

I would love to see where those sites state that without the clarification of only applying to those who start accruing NI after 2016 and Citizens Advice specifically state that applies to men born before April 1945.

You are under a transitional scheme where the higher of you accrued amounts under the old or new schemes at April 2016 was used as your post 2016 pension starting amount.  That would be no less than you had already achieved under the old system and if contracted out would likely be that amount, the higher amount new scheme takes no account of S2P and has a reduction for being contracted out and paying less NI.  You then have the opportunity to make that up with post 2016 contributions.  Winner, Winner, Chicken Dinner !

Merlin139

molerat said:

Boxerman66 said:

Having watched the MSE Show on TV last night 25/10/2022, I decided to check the internet for what constitutes full MI contributions. Answer was 35 years from NIDIRECT.gov. 35 years from WWW.gov.uk State Pension and Citizens Advice.org says 44 years. 
Just looked at my pension forecast and it says I have 4 years without contributions. It also says that I do have 42 years of contributions already stacked up.
My question is if I have contributed 12 years more or 7 years more or 2 years less depending on which figure is correct, why do I need to make more contributions to get the full pension when it's time? Am I confused? YES any suggestions or clarity would be appreciated. Thanks.

I would love to see where those sites state that without the clarification of only applying to those who start accruing NI after 2016

https://www.gov.uk/new-state-pension/how-its-calculated

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.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

Example

You have 20 qualifying years on your National Insurance record after 5 April 2016.

You divide £185.15 by 35 and then multiply by 20.

Your new State Pension will be about £105.80 per week.

Your new State Pension is more likely to be calculated in this way if you were born after the year 2000 or became a resident of the UK after 2015.

borders

Treat it like two different schemes, even though it all gets lumped together.

The old state pension maxed out at 30 years, even if you contributed more years. But the new one lets you improve on that.

The new one increases your pension for every year you contribute to it. 35 years is the maximum, but it isn't just a case of paying in for 5 more years. It's new and each year increases by 1/35 of the new maximum. If you had 30 years already, then it will probably take 7 or 8 additional years on the new pension to max out. i.e. contributions of 8/35, not 5 years.

As stated already, there are various individual factors involved but that's how it works for me personally and most of my colleagues.

molerat

borders said:

Treat it like two different schemes, even though it all gets lumped together.

The old state pension maxed out at 30 years, even if you contributed more years. But the new one lets you improve on that.

The new one increases your pension for every year you contribute to it. 35 years is the maximum, but it isn't just a case of paying in for 5 more years. It's new and each year increases by 1/35 of the new maximum. If you had 30 years already, then it will probably take 7 or 8 additional years on the new pension to max out. i.e. contributions of 8/35, not 5 years.

As stated already, there are various individual factors involved but that's how it works for me personally and most of my colleagues.

I am afraid that is a inaccurate over simplification of the way it works.  If you have a pre 2016 NI record it is all about personal circumstances, there is no simple one size guide for anyone.  MrsM reached SPA in 2020 with a full new pension and 35 years of contributions, only 1 being post 2016.

xylophone

YES any suggestions or clarity would be appreciated. Thanks.

What exactly does your state pension forecast say?

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

See example here

https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-forecast-explained-a24r12y9jt41

And have a look at this

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

eskbanker

Merlin139 said:

molerat said:

Boxerman66 said:

Having watched the MSE Show on TV last night 25/10/2022, I decided to check the internet for what constitutes full MI contributions. Answer was 35 years from NIDIRECT.gov. 35 years from WWW.gov.uk State Pension and Citizens Advice.org says 44 years. 
Just looked at my pension forecast and it says I have 4 years without contributions. It also says that I do have 42 years of contributions already stacked up.
My question is if I have contributed 12 years more or 7 years more or 2 years less depending on which figure is correct, why do I need to make more contributions to get the full pension when it's time? Am I confused? YES any suggestions or clarity would be appreciated. Thanks.

I would love to see where those sites state that without the clarification of only applying to those who start accruing NI after 2016

https://www.gov.uk/new-state-pension/how-its-calculated

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.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

Example

You have 20 qualifying years on your National Insurance record after 5 April 2016.

You divide £185.15 by 35 and then multiply by 20.

Your new State Pension will be about £105.80 per week.

Your new State Pension is more likely to be calculated in this way if you were born after the year 2000 or became a resident of the UK after 2015.

As that prominently states 35 years with 'the clarification of only applying to those who start accruing NI after 2016', it endorses @molerat's point completely, whereas @Boxerman66 obviously failed to pick up on that....

Silvertabby

molerat said:

borders said:

Treat it like two different schemes, even though it all gets lumped together.

The old state pension maxed out at 30 years, even if you contributed more years. But the new one lets you improve on that.

The new one increases your pension for every year you contribute to it. 35 years is the maximum, but it isn't just a case of paying in for 5 more years. It's new and each year increases by 1/35 of the new maximum. If you had 30 years already, then it will probably take 7 or 8 additional years on the new pension to max out. i.e. contributions of 8/35, not 5 years.

As stated already, there are various individual factors involved but that's how it works for me personally and most of my colleagues.

I am afraid that is a inaccurate over simplification of the way it works.  If you have a pre 2016 NI record it is all about personal circumstances, there is no simple one size guide for anyone.  MrsM reached SPA in 2020 with a full new pension and 35 years of contributions, only 1 being post 2016.

And in my case, I needed 48 years in order to accrue the full single tier pension. (44 years from working, 4 years from paying voluntary Class 3s).

Everyone is different.