Why less than 35yrs NI required ? 7 March at 12:52PM in Pensions, annuities & retirement planning 3 replies 261 views

exxtrasaving

Hi to all,
I have not been able to get a clear answer from DWP why in my case I do not need 35 qualifying years to get the full State Pension, and I wondered if some kind person here might be able to please explain ?
Up to Apr'22 my estimated pension is £155.36/week and a forecast of £185.15 if I contribute a further 6 years before Apr'30  (My official State retirement date is after Apr'30.) 
This is logical to me as £185.15 - £155.36 = £29.79, divided by £5.29 gives almost up to 6 years
However, my NI history shows as 26 years contributed up to Apr'22 (20 yrs up to Apr'16 plus 6 yrs to Apr'22)
Thus NI of 26 yrs up to Apr'22 plus 6 subsequent yrs takes me to 32 yrs, and not the 35 yrs that I was lead to believe we needed for the new State Pension ?
COPE estimate is showing as £28.69

Quite separately, I have 4 missing NI years up to Apr'16, only two of which are eligible for me to make up by imminently paying in this month.
I'm still in full time employment.
Many thanks for any help.

Linton

When the new State Pension was launched in April 2016 the SP accrued from prior to that date was calculated under both the old rules (with Basic SP + SERPs/S2P and 30 years max) and the new rules with 35 years max.  You were credited with the larger of the two amounts.

In your case it would seem that the old rules won and that your SERPs took you significantly above the 20 year new SP level.  Since you were ahead of the game at 20 years you needed less than 15 subsequent years to reach the new Standard SP.

35 years only applies to people who have only accrued SP under the new rules, which wont apply to many retirees for another 40 or so years.  Until then the transition calculation applies.

xylophone

On 6/4/16 your "starting amount" for NSP was calculated.

You say that you had 20 qualifying years at that date.

Your starting amount was the higher of

Old Rules

20/30 x £119.30 (Full Basic State Pension) + (Additional State Pension - Deduction for Contracting Out)

£79.53 + (ASP - DCO)


New Rules

(20/35 x £155.65) - COPE.

£88.94 -  £28.69 = £60.25

Your starting amount was given by the old rules calculation.

Since then your starting amount has been improved by your post 6/4/16 contributions.

You have accrued £155.36 up to 5/4/22.

Presumably you will have another qualifying year added 5/4/23.

After that,  five more years will bring you to full NSP.

See chart on p6 here

https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

molerat

At April 2016 your starting amount would have been £103.94, 20 years old basic of £79.53 plus S2P of £24.41 against 20 years new of £88.94 less COPE leaving £60.25.  That old scheme calculation effectively gave you another 3 years on top of the new years equivalent, your starting amount being worth 23 years.