State Pension query - won't get full pension but I have no NI gaps 11 March at 11:17PM in Pensions, annuities & retirement planning 14 replies 1.3K views

Fletchy

I have full NI years going back to the late 70s (so 40+ years) and retired in 2021 aged 60. On checking the state pension on the GOV website I may get in a few years I find that it will be £175 pw rather than the full £185. I have no gaps I can fill but I am hearing about people being able to contribute to fill gaps to get the full £185. The GOV website says I can't get more unless I have another 2 NI years? So it seems that I would have to go back to work even though I have so many full NI years already? I am not understanding why I need so many years to get the full amount. Can anybody help by explaining this? Why can't I choose to contribute to top my pension up?

molerat

35 years only applies to those starting out after 2016.  Everyone else is on a transitional scheme and may need more or less than the often misquoted 35 years, the highest mentioned here has been 50.  With that many years you would have been in a contracted out scheme paying a lower NI rate. At 2016 you were given the higher of the old or new schemes so you have not lost out. You should have the ability to fill up in the future. Post up the anonymous details from the forecast and someone will walk you through it and your options.

Current £.pp amount accrued up to April 2022
Number of pre 2016 NI years full
Number of post 2016 NI years full
Financial year you reach state retirement
Any COPE amount shown - a click link in the contracted out bit at the bottom
Years which show not full and prices

p00hsticks

Fletchy said:

 Why can't I choose to contribute to top my pension up?

You can. you can make voluntary contributions for any years you're not working. 

drumtochty

You do really have to keep up to date here, this question is asked at least twice a week and it is answered at least twice a week at. It has been asked since 2016 when the new state pension started and has been discussed both online and in the financial press for the last 5 years.

Also in they case of anyone who is retiring early they should always get a state pension forecast before they make an early retirement decision.

You will have worked in a company that took less National Insurance off you and therefore paid less into national insurance than you would have paid if you were not contracted out. More was paid into your occupational pension.

You will get extra money from your occupational pension and possibly private pensions called protected rights. To cover this so you have not lost out.

With regards to your state pension there are two state pension schemes operating, one the original state pension and the other the new state pension.

The original state pension today pays £141.85 a week, therefore you are due to get £175 per week that is £33.15 per week more than the basic state pension plus an increased occupational pension.

Therefore not an issue there.

You are in a very lucky position here in that you have around five years before your State Pension age where you can pay two years of voluntary NI contributions to increase you State Pension to today's rate of £155.15 a week.

Again, if you had kept up to date, you would have found that you can pay these voluntary NI contributions to increase your pension to £185.15.

xylophone

I have full NI years going back to the late 70s (so 40+ years) and retired in 2021 aged 60. 

https://forums.moneysavingexpert.com/discussion/comment/79911360/#Comment_79911360

comeandgo

You will have a gap next year and the year after so you can “ buy” those or do a self employed job and pay a greatly reduced voluntary NI for a couple of years.

Fletchy

comeandgo said:

You will have a gap next year and the year after so you can “ buy” those or do a self employed job and pay a greatly reduced voluntary NI for a couple of years.

Yes, I will look into possibly doing that. Thanks.

Fletchy

Although you may not have gaps looking back, the fact that your forecast says that you can reach the maximum amount by contributing for another two years, along with the fact that you say you retired in 2021 suggests that gaps will appear between now and the year in which you actually reach state pension age. 

If you've not been working or earning credits in some way then it's likely that the current year (2022-23) won't be full. If so, you'll be able to make a voluntary Class 3 contributions (or even the cheaper Class 2 if registered as self-employed) to  to fill it. 

Going forward if you wish you can pay in monthly installments by Direct debit for the current year - you just need to monitor your position and if necessary stop the DD when you have sufficient years to maximise your pension. 
Pay voluntary Class 3 National Insurance: Overview - GOV.UK (www.gov.uk)

Yes, I will look at possibly doing this. Thank you.

Fletchy

xylophone said:

I will loo into this further.

Um.....

Did you have a look at the link in my post above?

I did. Thanks for the explanation. I will be looking at the possibility of making contributions in 22/23 and 23/24 as I do not have any earlier gaps. I had thought paying NI contributions for 40+ years would mean I would get the full amount of pension available. I can now see that it isn't that simple. Thanks.

Sarahspangles

My partner is in similar circs, with 44 years continuous service yet he still needs to make up two years.  it’s simply that he was contracted-out as well.  He’s now determined to live long enough to ‘see the benefit’!

hyubh

Sarahspangles said:

My partner is in similar circs, with 44 years continuous service yet he still needs to make up two years.  it’s simply that he was contracted-out as well.  He’s now determined to live long enough to ‘see the benefit’!

So... your partner is likely another winner under the transitional arrangements. Congrats.