Problem purchasing National Insurance Years.

Blobberyouknow

Martin has brought up a massively important point about state pensions and buying National Insurance Years to increase the pension.  However in my experience it's not always as simple as you'd like.  

Facts 

• I'm a 66 yr old male who first began claiming his state pension in June of this year.

• I retired from paid work 12 years ago and at that time (according to my Nat Ins record) I had 38 full years of contributions.

• So my current Nat Ins record shows 38 full years and 12 "not full" (empty years).

• I do not get a full state pension apparently because despite having paid 38 years, some deduction has been made to my pension, maybe for SERPS?

• About 5 years ago I looked into buying extra years and was told by a guy at the pension service "to be careful which years I bought because if I bought the wrong years, they wouldn't increase my state pension".

Problem:

Just before beginning claiming my state pension this year I contacted the state pension service to ask again, how many years I'm short and which years to buy to increase my state pension.  They said they'd let me know by letter because they couldn't do it over the phone anymore.  After 3 months without a reply I asked again and also, nothing.  After 6 months (now) I've asked a 3rd time and again I'm awaiting a letter.

As Martin Lewis is pointing out in his current newsletter, the clock is ticking and how many years we can back-claim changes (reduces) in April next year.

I'm so frustrated that I cannot get the 2 simple bits of information I need from the state pension service, namely how many years I'm actually short and which actual years to buy to count towards my state pension.

I cannot get beyond the "front desk" of the state pension service who tell me that "they" have to (and have in the past) email the "relevant department" who deal with these requests.  The fact that the "relevant department" themselves no longer deal directly with the general public is absolutely maddening.

Can anyone advise me what to do next?

 

molerat

It ain't rocket science as they say. 

As you have in excess of 35 pre 2016 years buying extra pre 2016 years will not add to your pension, that is simply the thing you have to be careful of.  Post 2016 years cannot fail to add value up to the maximum amount. 

To work out what you need simply £185.15 - your current weekly amount / £5.29 gives you the number of years you need to reach the max.  Your NI record will show how many post 2016 years are available to buy, only 2016-17 ceases to be available next year.

(I have reported this thread to be moved to pensions)

Blobberyouknow

Molerat.

That's brilliant info, thank you.  So can I check with you, using your figures?

£185.15 - £144.53 (my pension amount) = £40.62 (which is what I'm losing each week).

£40.62/5.29 = 7.68 years I need to buy yes?

The years available to me (post 2016) are 2016-17, 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22.  So I can only purchase 6 years?  But frankly I'd be quite happy with that.

Have I got this correct?

I really appreciate your help with this.  Thank you.

molerat

Yep, it is as straightforward as that.

Purchasing those 6 available years would add £31.74 to your pension bringing you up to £176.27.

https://www.gov.uk/pay-voluntary-class-3-national-insurance

It is The Pension Centre you would need to speak to for confirmation.

Droopy61

If you register with gov.uk you can see all this information online. I retired in 2017 so I'll owe 6 years voluntary contributions to increase the state pension, though it doesn't say by how much. I'll have to wait my turn on the phone helpline for that.

molerat

Droopy61 said:

If you register with gov.uk you can see all this information online. I retired in 2017 so I'll owe 6 years voluntary contributions to increase the state pension, though it doesn't say by how much. I'll have to wait my turn on the phone helpline for that.

Each post 2016 year will add £5.29 to your pension up to the maximum £185.15.

NedS

molerat said:

Droopy61 said:

If you register with gov.uk you can see all this information online. I retired in 2017 so I'll owe 6 years voluntary contributions to increase the state pension, though it doesn't say by how much. I'll have to wait my turn on the phone helpline for that.

Each post 2016 year will add £5.29 to your pension up to the maximum £185.15.

As @molerat has stated, each year currently adds £5.29, or a 35th of the full state pension amount, so: £185.15 / 35 = £5.29

xylophone

• I do not get a full state pension apparently because despite having paid 38 years, some deduction has been made to my pension, maybe for SERPS?

You say that you retired from paid employment twelve years ago  with 38 qualifying years.

It would appear that for some or all of your working life, you were a member of a pension scheme /schemes contracted out of SERPS/S2P.

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out#:~:text=Contracting out was a method,SERPS) for particular tax years.

The new state pension was introduced 6/4/16 at which point two calculations were done for you to establish your starting amount for NSP.

Old Rules

NI years (max 30)/30 x Full Basic  State Pension +  (Additional State Pension - Deduction for Contracting Out)

New Rules

(NI Years (max 35)/35 x Full New State Pension) - Contracted Out Pension Equivalent.

The higher of the two was your starting amount.

It was less than a full NSP and you had a number of years between 6/4/16 and the last full tax year before  you reached  State Pension Age.

This gave you the opportunity to make NI contributions  for those years to increase your starting amount up to (but not in excess of) a full NSP.