Additional NI contributions if you have full history but were contracted out

p00hsticks

Spivved1987 said:

xylophone said:

Could you give the information requested

 https://forums.moneysavingexpert.com/discussion/6431160/additional-ni-contributions-if-you-have-full-history-but-were-contracted-out/p1

• Maximum amount of forecast
• Current amount up to April 2022
• Years you have available going forward until you reach State Pension Age
• Number of full years prior to April 2016
• Number of full years after April 2016
• Years which are not filled and the cost of filling them
• Whether there is a COPE mentioned and if so what the amount is (this will show by clicking a link there is a statement along the lines of ' like many, you have been contracted out.....'.)

Maximum amount of forecast 185.15

Current amount £177.41

Years available to SP 2 years

Full years prior to April 2016 34

Full years after April 2016 to 5 April 2022  5

Years not filled and cost

2010-11 £523.05

2011-12 £126.80

2016-17 523.05

COPE Estimate £85.06 per week

For 2022-23 I will not have a full year, and would imagine it will cost whatever a full year costs

There is no value in you buying those pre 2016 years as with a COPE that large your 'starting amount' at the introduction of the new State Pension will have been that from the old rules calculation which only uses a maximum of 30 years, and you had already exceeded that by that point, so buying more would be of no benefit. 

Buying one additional post-2016 year will increase your weekly amount by £5.29 to £182.70, a second year would add a further £2.45 to take you to the maximum £185.15

The 2016-17 year is going to be the cheapest, as presumably that is partly filled already, but goes off sale in July, so you're going to need to act reasonably quickly and either brave the phonelines to get your 18 digit reference from HMRC to make an online payment or alternatively you can post a cheque with accompanying letter, using your NI number instead.    

For your second year, the current 2022-23 year would cost £824.20 if it is completely empty, and remains at that price until April 2025.

The price for next year, 2023-24, which is the only other year you are going to have available to fill, rises to £907.40 and you won't be able to buy it until the new tax year - although it will be of no benefit to buy it if you fill the other cheaper two..  

National Insurance: general enquiries - GOV.UK (www.gov.uk)
Pay voluntary Class 3 National Insurance: By cheque through the post - GOV.UK (www.gov.uk)

Spivved1987

That's excellent - a very comprehensive answer. Many thanks.

Silvertabby

xylophone said:

I thought Xylophone brought up the subject:

But not to bring up the gold plated pension.

You had said

am in receipt of an occupational DB pension, but I can't see any mention of this amount in anything I have routinely received from my pension provider. 

I was wondering whether or not you knew  anything of the GMP increase provision!

Very few people do.





 

xylophone

Very few people do.

I didn't myself until I needed to take an interest and then the subject started to exercise a strange fascination......

Silvertabby

xylophone said:

Very few people do.

I didn't myself until I needed to take an interest and then the subject started to exercise a strange fascination......

Expect a lot of queries on these boards come April/May, from pre 2016 SPA public sector pensioners who didn't get the full 10.1% increase on their occupational pensions.

Spivved1987

Silvertabby said:

xylophone said:

Very few people do.

I didn't myself until I needed to take an interest and then the subject started to exercise a strange fascination......

Expect a lot of queries on these boards come April/May, from pre 2016 SPA public sector pensioners who didn't get the full 10.1% increase on their occupational pensions.

To be honest, I assumed that most schemes would have some exclusionary terms enabling them to avoid shadowing the Triple Lock, if to do so became too expensive because of 'unusual' circumstances. I can remember seeing loans which were headlined as Base Rate plus 3% (when Base Rate was 10%): but when Base Rates collapsed after Black Wednesday suddenly the lenders were able to impose a 'floor' beneath which Base Rates for the purposes of the loan interest rate could not fall, irrespective of what the BoE did.

Silvertabby

Spivved1987 said:

Silvertabby said:

xylophone said:

Very few people do.

I didn't myself until I needed to take an interest and then the subject started to exercise a strange fascination......

Expect a lot of queries on these boards come April/May, from pre 2016 SPA public sector pensioners who didn't get the full 10.1% increase on their occupational pensions.

To be honest, I assumed that most schemes would have some exclusionary terms enabling them to avoid shadowing the Triple Lock, if to do so became too expensive because of 'unusual' circumstances. I can remember seeing loans which were headlined as Base Rate plus 3% (when Base Rate was 10%): but when Base Rates collapsed after Black Wednesday suddenly the lenders were able to impose a 'floor' beneath which Base Rates for the purposes of the loan interest rate could not fall, irrespective of what the BoE did.

The triple lock only applies to the State pension, never occupational pensions (public or private) ... although it may not seem that way when it's the cost of living increase  that is brought into play rather than 2.5%/wages increase 

However, in this discussion, xylophone and I are talking about how GMP increases are applied (or not applied!) which will no doubt be the root of much confusion in April/May.

hyubh

Spivved1987 said:

Silvertabby said:

xylophone said:

Very few people do.

I didn't myself until I needed to take an interest and then the subject started to exercise a strange fascination......

Expect a lot of queries on these boards come April/May, from pre 2016 SPA public sector pensioners who didn't get the full 10.1% increase on their occupational pensions.

To be honest, I assumed that most schemes would have some exclusionary terms enabling them to avoid shadowing the Triple Lock, if to do so became too expensive because of 'unusual' circumstances.

As Silvertabby says, even public sector schemes don't increase by the triple lock (= higher of wage inflation, price inflation, and 2.5%). Statutory increases on pre-97 excess are zero, and post-97 excess only inflation capped to 5% or 2.5% depending on the period of membership ('service tranche'). Now, it's perfectly possible for a private sector DB scheme member to enjoy increases equal to or even better than the uncapped inflation used by public sector. This might be so in principle, or in some years on some of their pension. However in the majority of cases it won't be so. 

xylophone

Now, it's perfectly possible for a private sector DB scheme member to enjoy increases equal to or even better than the uncapped inflation used by public sector. 

There are still schemes that have uncapped RPI on excess over GMP.

And some schemes that are far more generous than required by the "statutory" rules.

hyubh

xylophone said:

Now, it's perfectly possible for a private sector DB scheme member to enjoy increases equal to or even better than the uncapped inflation used by public sector. 

There are still schemes that have uncapped RPI on excess over GMP.

And some schemes that are far more generous than required by the "statutory" rules.

That's why I said 'it's perfectly possible', whether full stop or only 'in some years on some of their pension' (e.g. 'RPI min 3% max 5%' - very nice for many recent years, not so great for the upcoming or just gone pension increase). If you're doubting my claim that 'in the majority of cases it won't be so' (i.e. pension increases being at, or better, than 'official pensions'), I'm going to have to ask for evidence...