Can someone help me understand State Penson Forecast?

suestew

Hi, when I looked up my State Pension is says I am entitled to £194.18 and that's the most I can get (I know this isn't a guarantee but worked out on todays forecast). 

When I view my NI contributions, I have 

• 30 full years of contributions
  
• 12 years to contribute before 5 April 2034
• 9 years when you did not contribute enough

The reason for 9 years not contributing is I work part time and don't earn enough to pay tax. I do realise I could have paid NI over those years but I didn't realise I had that option. 

My question is how many years shortfall do I have to make up to get the full state pension, I can't find this information anywhere. All I have found is "If you’re working you may still need to pay National Insurance contributions until  2034 as they fund other state benefits and the NHS".

Thanks

molerat

It is not a guarantee but that is with respect to the current regulations and subject to re-doing the sums prior to retirement but if your forecast states a number above the current maximum of £185.15 then that is what you had at April 2016 and is what you will get.  No contributions you make in the future will add to that.  You have already reached the maximum, it should say "you cannot improve your forecast" or similar. You still have to pay NI, it is just another tax. Paying NI can make you eligible for other benefits and funds the NHS etc but will not add to your pension.

How many pre 2016 years do you have ?

suestew

molerat said:

It is not a guarantee but that is with respect to the current regulations and subject to re-doing the sums prior to retirement but if your forecast states a number above the current maximum of £185.15 then that is what you had at April 2016 and is what you will get.  No contributions you make in the future will add to that.  You have already reached the maximum, it should say "you cannot improve your forecast" or similar. You still have to pay NI, it is just another tax. Paying NI can make you eligible for other benefits and funds the NHS etc but will not add to your pension.

How many pre 2016 years do you have ?

Pre 2016 is 30 years. Its the last 9 years to date that I have not made contributions. 

molerat

Just checking because if you had less than 30 years pre 2016 with gaps you would have been able to add to that but as it stands there is nothing more you need to do, you have reached the peak.

Audaxer

Looks like you are already over the maximum for the new State Pension. To get there with only 30 years of full contributions is a very good position to be in, so I agree that it appears that even if you paid NI for the next 12 years, it wouldn't increase the amount you will be able to claim.

Just to confirm the £194.18 per week will increase each year due to Triple Lock, if it stays in place, although there is still doubt about the government honouring it this year.

xylophone

Just to confirm the £194.18 per week will increase each year due to Triple Lock, if it stays in place, although there is still doubt about the government honouring it this year.

To be more precise, if the Triple Lock remains, it is only the amount equal to full NSP (£185.15) that will increase by 2.5%/Earnings/CPI whichever is the highest.

The balance (£9.03) is the OP's "Protected Payment" which increases by CPI.

suestew

Thanks all for your help