State Pension Forecast - Still confused

scottiescott

Despite reading numerous threads and the MSE guide I am still non the wiser as to what I'll get and whether to pay voluntary contributions to boost my pension.
If I give the facts and figures could someone please simplify it for me, thank you? Sorry I can't do a screen shot on my Government Gateway account.
So, National Insurance Record - 41 years full contributions, 3 years to contribute before 2025 (whatever that means), 6 years when you did not contribute enough.
I can get my state pension on 26th January 2026. I retired (early) on 30th April 2016. I was contracted out from 26th January 1980 until retirement date. I paid a small amount of NI in 2016-2017 (since I retired  end of April) and have made no NI contributions since then. I assume that is the "6 years when you did not contribute enough"
State Pension Summary - Your forecast is £159.62 a week.
"You need to continue to contribute NI to reach your forecast"
Estimate based on your NI record up to 5th April 2022 - £143.75 a week.
Forecast if you contribute until 5th April 2025 - £159.62 a week
"You can improve your forecast"
You have shortfalls in your NI record that you can fill and make count towards your State Pension.
The most you can increase your forecast to is £185.15.
So, as I said could someone please tell me what if anything I need to do, particularly if I need to make ( or is it worth making) voluntary contributions to boost my pension.
Many thanks in advance.

Dazed_and_C0nfused

scottiescott said:

Despite reading numerous threads and the MSE guide I am still non the wiser as to what I'll get and whether to pay voluntary contributions to boost my pension.
If I give the facts and figures could someone please simplify it for me, thank you? Sorry I can't do a screen shot on my Government Gateway account.
So, National Insurance Record - 41 years full contributions, 3 years to contribute before 2025 (whatever that means), 6 years when you did not contribute enough.
I can get my state pension on 26th January 2026. I retired (early) on 30th April 2016. I was contracted out from 26th January 1980 until retirement date. I paid a small amount of NI in 2016-2017 (since I retired  end of April) and have made no NI contributions since then. I assume that is the "6 years when you did not contribute enough"
State Pension Summary - Your forecast is £159.62 a week.
"You need to continue to contribute NI to reach your forecast"
Estimate based on your NI record up to 5th April 2022 - £143.75 a week.
Forecast if you contribute until 5th April 2025 - £159.62 a week
"You can improve your forecast"
You have shortfalls in your NI record that you can fill and make count towards your State Pension.
The most you can increase your forecast to is £185.15.
So, as I said could someone please tell me what if anything I need to do, particularly if I need to make ( or is it worth making) voluntary contributions to boost my pension.
Many thanks in advance.

You don't need to make voluntary contributions.

But if you add 8 post 2016 years you will go from £143.75/week to £185.15/week.

An extra £2,150/year before tax.

Only you know if the cost is worth it but unless you are an investment genius you will struggle to get as good a return on your money as an inflation proofed £41.40/week for the rest of your life.  Even accounting for the fact you will lose the capital used to pay the voluntary NI.

If you add 7 years you will get to £180.78 with the final year only adding the final £4.37/week.  Not quite as good as the first 7 but still great value.

Marcon

scottiescott said:

Despite reading numerous threads and the MSE guide I am still non the wiser as to what I'll get and whether to pay voluntary contributions to boost my pension.
If I give the facts and figures could someone please simplify it for me, thank you? Sorry I can't do a screen shot on my Government Gateway account.
So, National Insurance Record - 41 years full contributions, 3 years to contribute before 2025 (whatever that means), 6 years when you did not contribute enough.
I can get my state pension on 26th January 2026. I retired (early) on 30th April 2016. I was contracted out from 26th January 1980 until retirement date. I paid a small amount of NI in 2016-2017 (since I retired  end of April) and have made no NI contributions since then. I assume that is the "6 years when you did not contribute enough"
State Pension Summary - Your forecast is £159.62 a week.
"You need to continue to contribute NI to reach your forecast" You haven't paid enough full years of contributions to get £159.62 a week; the forecast assumes you will pay further NI between now and SPA
Estimate based on your NI record up to 5th April 2022 - £143.75 a week.  An estimate of what you'll get at SPA if you don't pay any more NI between now and then
Forecast if you contribute until 5th April 2025 - £159.62 a week This is what you are forecast to get if you go on paying for the years up to 5 April 2025, assuming each year is full
"You can improve your forecast"
You have shortfalls in your NI record that you can fill and make count towards your State Pension.
The most you can increase your forecast to is £185.15. Paying some extra NI contributions could increase your pension at SPA to £185.15
So, as I said could someone please tell me what if anything I need to do, particularly if I need to make ( or is it worth making) voluntary contributions to boost my pension. If you pay voluntary NI it will boost your pension, so if you want to do that (and it's generally seen as an excellent investment, given how quickly it 'pays off'), yes/If you aren't planning to work again, and thus won't make any NI contributions in the course of employment or self-employment, you could cover the years from now until 2025 by making voluntary contributions
Many thanks in advance.

Please see above comments in bold and italic. 

Audaxer

It basically means that if you continue paying NI for the next 3 years your forecast will increase by £5.29 per week for each year, so going from £143.75 to £159.62 per week. You can however increase it up to £185.15 if you pay an extra 5 years when you did not contribute enough. If these years are all post 2016, paying them will increase your SP by £5,29 per year. If however the gaps are years before 2016, paying these years could possibly get you slightly less than £5.29 extra per week for each year. Probably best to check with the Future Pensions Centre if you want to fill gaps that are before 2016, to be sure of how much the increases will be for each year.

Silvertabby

Audaxer said:

It basically means that if you continue paying NI for the next 3 years your forecast will increase by £5.29 per week for each year, so going from £143.75 to £159.62 per week. You can however increase it up to £185.15 if you pay an extra 5 years when you did not contribute enough. If these years are all post 2016, paying them will increase your SP by £5,29 per year. If however the gaps are years before 2016, paying these years could possibly get you slightly less than £5.29 extra per week for each year. Probably best to check with the Future Pensions Centre if you want to fill gaps that are before 2016, to be sure of how much the increases will be for each year.

OP was contracted out from 1980 until 2016, so no (payable) gaps to fill.  Even if there were, with that amount of contracted out service it's a safe bet that only paying for post 2016 will add to their pension.

scottiescott

Many thanks guys. A lot easier to understand when explained like that. I wish the Government Gateway Pension Forecast used the same terminology. 

Audaxer

Silvertabby said:

Audaxer said:

It basically means that if you continue paying NI for the next 3 years your forecast will increase by £5.29 per week for each year, so going from £143.75 to £159.62 per week. You can however increase it up to £185.15 if you pay an extra 5 years when you did not contribute enough. If these years are all post 2016, paying them will increase your SP by £5,29 per year. If however the gaps are years before 2016, paying these years could possibly get you slightly less than £5.29 extra per week for each year. Probably best to check with the Future Pensions Centre if you want to fill gaps that are before 2016, to be sure of how much the increases will be for each year.

OP was contracted out from 1980 until 2016, so no (payable) gaps to fill.  Even if there were, with that amount of contracted out service it's a safe bet that only paying for post 2016 will add to their pension.

Thanks, I missed that. So good news for OP that 8 years post 2016 voluntary contributions should take him up to the maximum.

Qyburn

Maybe the sticky could do with a "How to read you state pension forecast"

Silvertabby

.... and explain that when DWP say 'full year of NI contributions' they just mean 'full financial year' and not 'paid full rate of NI instead of the reduced, contracted out, (of SERPS/SP2) rate of NI'.

p00hsticks

Qyburn said:

Maybe the sticky could do with a "How to read you state pension forecast"

Yes, I've already suggested that the recent 'sticky' guide should include a screenshot of a typical State Pension forecast with each different part numbered and an accompanying explanation of what each numbered part means.

MallyGirl

so have I - they have said they will revisit the guide bearing in mind the feedback on here