Confused about how many years NI contributions I need.

Chomeur

Dazed_and_C0nfused said:

Chomeur said:

Audaxer said:

Chomeur said:

I have 27 years full NI contributions and reach retirement age in 2035. According to the MSE guide on this (https://www.moneysavingexpert.com/savings/state-pensions/) I need at least 35 qualifying years, or maybe many more! To work it out, the guide says to check my state pension forecast. This says "Forecast if you contribute another 11 years before 5 April 2035 £185.15 per week."

So, is the state pension forecast telling me that I need to contribute for another 11 years? Or, if I only contribute for another eight years to make it up to 35, will I still get £185.15? I guess it must be the former, because otherwise I don't see why they give a figure of 11 years. But it could be clearer. 

Thanks.

Your forecast statement should also have a figure for 'Estimate based on your NI Record up to 5/4/22'. If you let us know that figure we will be able to calculate how many years NI will get you to the maximum.

£131.08.

All my previous years are full back to 2008. I think that, including the current tax year, I have 13 years to complete my 38 years, and need 11 of them. I'm inclined to pass on this year, and the next one, and then make payments for the remaining 11, voluntary ones if I'm not working. I'm not working now, but might do again in the future.

If your looking at post 2916 years then the eleventh year will only add the final £1.17.

Not nearly as good value as the first ten, especially if you would be liable to tax on it.

OK, so I'll make a note to consider whether it's worth making the 11th payment when the time comes. But, as an estimate, it's worth 52*£1.17 *20 years =~ £1200 for 52* £15.85 weekly Class 3 which is about £800 so looks still worth it.

Audaxer

I agree that as another 10 years NI will leave you only £1.17pw short of the maximum, probably not worth paying for the 11th year. However you have plenty of time to decide on that one.

GrubbyGirl_2

yp70479 said:

Were you ever in a contracted out pension scheme. If so you paid a lower rate of NI all that time, and now they want it back! I had been contracted out most of my working life and despite having 35 years of contributions I still needed another 4 years to get full state pension. Best to ring up ad talk to the Future Pensions Service they can explain/advise

Indeed if you were ever contracted out for some or all of your working life the number of years needed to get a full pension can be very different.  For example I was contracted out for all of my working life so my forecast says that I have 45 years of contributions but I still need 4 more years of contributions to get the full pension 

Silvertabby

GrubbyGirl_2 said:

yp70479 said:

Were you ever in a contracted out pension scheme. If so you paid a lower rate of NI all that time, and now they want it back! I had been contracted out most of my working life and despite having 35 years of contributions I still needed another 4 years to get full state pension. Best to ring up ad talk to the Future Pensions Service they can explain/advise

Indeed if you were ever contracted out for some or all of your working life the number of years needed to get a full pension can be very different.  For example I was contracted out for all of my working life so my forecast says that I have 45 years of contributions but I still need 4 more years of contributions to get the full pension 

Ditto.  I was contracted out from 1978 to 2016 and needed 48 years (44 from working, 4 from paying voluntary Class 3s) of NI contributions in order to qualify for the nsp.

I consider myself one of the winners under the new scheme, as I had enough time between retirement (age 60) and SPA (66) to be able to top up my pension by the 4 years needed.  In my case, the final year gave me £4.80 so an easy decision to buy.  

pinnks

Similar position to Silvertabby.  Was out of the UK with gaps for about 8 years but will end up with something like 39 UK years, including 4 and a filled part year in the year I retired paid voluntarily.  I end up about £1 per week short of the new max as I "run out of years" to pay voluntarily but still consider myself a winner under the new rules. 

Apparently about 80% of us were contracted out, most of whom will surely be winners?

Silvertabby

pinnks said:

Similar position to Silvertabby.  Was out of the UK with gaps for about 8 years but will end up with something like 39 UK years, including 4 and a filled part year in the year I retired paid voluntarily.  I end up about £1 per week short of the new max as I "run out of years" to pay voluntarily but still consider myself a winner under the new rules. 

Apparently about 80% of us were contracted out, most of whom will surely be winners?

For those of us with enough time between 2016 and SPA almost definitely.  I'm really tired of reading all the whingers claiming to have been 'robbed' because no-one told them years ago that being contracted out would mean that their State pension would be 'reduced'.  Really?  Even before the introduction of the nsp, those who were contracted out received less than those who had paid into SERPS/SP2, yet I don't remember anyone whining about that.

pinnks

I couldn't agree more.  And add to that, the fact that people who live, or have lived, in the EU can be double winners because they can pay UK voluntary NIC to enhance their nSP at very favourable Class 2 rates, thus meaning they may have a full UK state pension plus one or more from EU countries in which they have worked (again, potentially enhanced by voluntary contributions in those countries) plus any workplace or private pensions from their various countries of work.  But that is, perhaps a whoe other story!

I think the fundamental issue(s) is/are that we don't include "financial/pensions awareness" (or words to that effect) in our education system and the vast majority of the population (choose you own %) are just not motivated to think of pensions 30 to 50 years before they come to fruition, by which time it is of course getting a tad late. 

GunJack

Silvertabby said:

pinnks said:

Similar position to Silvertabby.  Was out of the UK with gaps for about 8 years but will end up with something like 39 UK years, including 4 and a filled part year in the year I retired paid voluntarily.  I end up about £1 per week short of the new max as I "run out of years" to pay voluntarily but still consider myself a winner under the new rules. 

Apparently about 80% of us were contracted out, most of whom will surely be winners?

For those of us with enough time between 2016 and SPA almost definitely.  I'm really tired of reading all the whingers claiming to have been 'robbed' because no-one told them years ago that being contracted out would mean that their State pension would be 'reduced'.  Really?  Even before the introduction of the nsp, those who were contracted out received less than those who had paid into SERPS/SP2, yet I don't remember anyone whining about that.

I think the thing is, sooo many people don't realise that the overall position for those contracted out is generally better when the works pension is added on...it's like they've "conveniently" forgotten it.