State pension and qualifying years

Linton

GB12 said:

Linton said:

GB12 said:

Linton " probably because you were contracted into SERPs for a significant period" definitely not contracted into serps. 
Xylophone I might have had as much as 44 years contributions by 2016. Very little breaks 

I am surprised - contracted-in was the default unless you were in a DB pension scheme or possibly some other types of employer scheme.  Were you in a DB pension scheme all your working life?

What is your total weekly SP?  Is it the protected payment + £185.15?

Yes to 185.15
Did have a company pension 9 years worth paid out in cash and put into a SIPP 5 years ago.  
Maybe it is a c*ck up by pensions.
Is serps the state pension. I thought it was something else?
Aked for a letter of explanation and confirmation. 

SERPs was part of the state pension and was paid out of your NI.  It was originally intended as a DB ("final salary") pension for those people who did not have employer DB pensions.  Most employer DB pensions contracted-out of SERPs which meant that the members paid lower NI.  So if you paid NI and werent a member of an employer pension scheme you would have paid into SERPs.

SERPs (or its later replacements such as ASP or S2P) stopped in  2016 when ti was merged with the new SP.

Your weekly SP value of protected-payment+standard SP does suggest that SERPs is the reason.

GB12

I had about 9 years paying into a company pension other than that everything was serps. I personally didn't pay into the company paid into it.
Someone else suggested I was probably entitled to the additional state pension. 
Either way thanks all. 

Aristotle67

Just revisiting a minor point which arose from earlier discussion.

I have 12 years between now and when I reach state pension age which obviously provides more than enough opportunity for me to make the 10 years' worth of annual payments of voluntary contributions I need for the full pension. There are some missing years which I could pay at the current rate rather than when the rate increases, as of course it does each year. It will be cheaper in the long run to do this and would mean I could stop paying voluntary contributions before 2032.

Can anyone think of anything that might happen in the future with voluntary contributions which would make the above inadvisable?

Employees have too keep paying NI until they reach state retirement age; there is no way a similar provision would be introduced for voluntary contributions, is there? That was the only possibility I could think of, apart from a significant increase in the annual rate of voluntary contributions, though I suspect it is unlikely. But I have learned through life never to take anything for granted when it comes to money and payments.

Dazed_and_C0nfused

Employees have too keep paying NI until they reach state retirement age; there is no way a similar provision would be introduced for voluntary contributions, is there? 

I think you've misunderstood the meaning of voluntary.

Audaxer

Aristotle67 said:

Just revisiting a minor point which arose from earlier discussion.

I have 12 years between now and when I reach state pension age which obviously provides more than enough opportunity for me to make the 10 years' worth of annual payments of voluntary contributions I need for the full pension. There are some missing years which I could pay at the current rate rather than when the rate increases, as of course it does each year. It will be cheaper in the long run to do this and would mean I could stop paying voluntary contributions before 2032.

Can anyone think of anything that might happen in the future with voluntary contributions which would make the above inadvisable?

Employees have too keep paying NI until they reach state retirement age; there is no way a similar provision would be introduced for voluntary contributions, is there? 

Many people already retired have already paid enough NI to be at the maximum SP forecast before they reach SP age. I can't see any government changing the rules so that to keep that maximum forecast, they will have to restart paying voluntary NI until they reach SP age - if that is what you are thinking.

Aristotle67

Audaxer said:

Many people already retired have already paid enough NI to be at the maximum SP forecast before they reach SP age. I can't see any government changing the rules so that to keep that maximum forecast, they will have to restart paying voluntary NI until they reach SP age - if that is what you are thinking.

I suppose that was the sort of thing I was wondering about. Thanks.

Aristotle67

I will take the opportunity to pay missing years at the current rate. There are six years I can pay which in total amounts to almost £5000, leaving me with just four more years to contribute for the full state pension.

I compared this with putting £5000 into a one year bond @ 4% to yield £200. The increase in voluntary class 3 contributions for 2023-24 is £83.20, thus £200 would cover this and more. The obvious downside of doing that is I would have to pay NI each year at whatever the class 3 rate was, and it seems sure to increase year in, year out, whereas interest rates on bonds might not. It appears prudent to pay the missing years whilst the opportunity is there. Who knows what might happen in the future?

Aristotle67

Just before I do make the payment, perhaps someone could confirm something for me? I, like many before me, cannot get through to the Future Pensions Centre but I was able to get through and obtain the reference number required from HMRC.

From when I turned 16 years old in 1983/84 up to and including 2015/16 there are 33 years. I have full contributions for 22 of these. There are 5 years of no contributions from 2006/07 to 2015/16 which I was intending to pay at the current rate of £824.20. The remaining 6 years are from so long ago that it is not possible to make payments for these.

From 2016/17 to 2021/22, there are 6 years. I have full contributions for 5 of these and 1 outstanding year which I am intending to pay.

These contributions should go towards the 10 years I need to make in order to obtain the full state pension in 2034. I will not be working in employment between now and then. Thanks once again to molerat who confirmed that 10 years of additional contributions are required for the full state pension.

Can anyone confirm that a full payment for the 6 outstanding years from 2006/07 to 2021/22 will all increase my pension forecast? I cannot see why they would not as I have less than 30 years of contributions pre 2015/16, but before I part with £4945.20 I thought I had better check. 



 

molerat

Bringing pre 2016 years up to 30 cannot fail to add value.  Depending on whether your starting amount is under the old or new schemes they add a different value, £4.73 old and £5.29 new.  Looking at your figures you are under the old rules so adding 5 pre and 5 post will bring you to £184.58, 67p short. 

Aristotle67

Thank you very much, molerat. I can live with the 67p shortfall. Much obliged.