Do you lose and years of contribution if you retire before state pension age?

Vininaspin

Hi All,

I could not find the answer to my question on the Gov website. I have 31 fully paid up years with 4 left to go according to the HMRC app. 

If/when I have fully paid up 35yrs maximum contribution, will I lose any of those years if I decide to stop working before pension age? I ask, because I’ll be 56 by the time I am fully paid up but I want to retire by the time I’m 62 (if I’m in a good position to do so). However, I believe my state retirement age by then will be 68yrs meaning I won’t have contributed for the final 6yrs leading up to receiving my State pension. If I’d not work those final 6 years and this don’t may contributions, will I lose a year from my paid up years for each year I do not work up until pensions age?

Thanks in advance. 

dealyboy

Welcome to the MSE forums ...

Vininaspin said:

Hi All,

I could not find the answer to my question on the Gov website. I have 31 fully paid up years with 4 left to go according to the HMRC app. 

If/when I have fully paid up 35yrs maximum contribution, will I lose any of those years if I decide to stop working before pension age? I ask, because I’ll be 56 by the time I am fully paid up but I want to retire by the time I’m 62 (if I’m in a good position to do so). However, I believe my state retirement age by then will be 68yrs meaning I won’t have contributed for the final 6yrs leading up to receiving my State pension. If I’d not work those final 6 years and this don’t may contributions, will I lose a year from my paid up years for each year I do not work up until pensions age?

Thanks in advance. 

... no.

Make sure your state pension forecast at the time shows what you will get is the maximum and that you cannot improve on this.

molerat

Check your pension forecast.  35 years is of no relevance to you, your pension forecast will show how many more years you need to contribute - the total may be more or less than 35.

p00hsticks

No you won't lose years - they don;t take years obtained away from you.

But you seem to be possibly working under the misapprehension that you are going to need 35 years.

That may be true, but is only 100% certain for those who started their working lives after the introduction of the new State Pension in 2016. People over that age fall under 'transitional rules' and may need more or less years.

If you haven't already, you shoud look at your own individual pension forecast to see exactly how many more years you need to fill to reach the maximum.

https://www.gov.uk/check-state-pension

Even if you choose to retire before State Pension Age, you can (at present) continue to make voluntary NI contributions if you want to boost your forecast if needed.

xylophone

What exactly does your state pension forecast say?

Vininaspin

Thank you to you all for your responses. 

I can confirm that according to the HMRC website the forecast for me, states I have another 4 years to make NI contributions and then I will be forecast to receive £185.15 per week. Hence, I wondered if that was reliable for me to consider when planning for an early retirement. I have made full contributions since 1986 but with 2yrs (2006 & 2007) where I made only part contributions. However, I don’t want to pay any additional contributions to those 2 years where I fell short if it is not going to make any difference to what I receive upon retirement, when I plan to work for at least the next four years and beyond. 

Thanks again all. 

Audaxer

Vininaspin said:

Thank you to you all for your responses. 

I can confirm that according to the HMRC website the forecast for me, states I have another 4 years to make NI contributions and then I will be forecast to receive £185.15 per week. Hence, I wondered if that was reliable for me to consider when planning for an early retirement. I have made full contributions since 1986 but with 2yrs (2006 & 2007) where I made only part contributions. However, I don’t want to pay any additional contributions to those 2 years where I fell short if it is not going to make any difference to what I receive upon retirement, when I plan to work for at least the next four years and beyond. 

Thanks again all. 

What figure does your statement have for Estimate for NI paid to 5/4/22?

Vininaspin

It states I paid a full year of £4.2k

Vininaspin

I should mention it states I have paid 34 years in full but have to complete a further 4 to receive maximum state pension. 

pinnks

That is from your NI record, not your pension forecast.  You should get the latter from GOV UK (e.g. through your Personal Tax Account) as that will tell you how much pension your NI record will lead to at 5 April 2022.  From that you can establish how many more years you need to pay to achieve the £185.15 max.
 

molerat

If the forecast clearly states you can get the full amount with paying "4 more years before 20XX" and you intend to work more than those 4 years then there is no point buying back years.