New state pension, contracting out and COPE

tamste

Be careful how you read the forecast.

Mine says I will get X with contributions made so far as well as projected maximum if you pay Y number of years NI. 
With mine, need 2 more years contributions to reach the max, caused by being contracted out in the NHS.

xylophone

Have a look at this facsimile of a state pension forecast issued in tax year 2018/19 when full NSP was £164.35.

https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-forecast-explained-aHd0S6f725a9

The forecast is for full NSP but it is made clear that the person has to continue to contribute for a certain number of years to reach the forecast.

What is shown on your forecast under

Estimate Based on your NI record to 5/4/22?

C_Mababejive

Dazed_and_C0nfused said:

C_Mababejive said:

So to simplify, if the forecast says ill get the full state pension of £185, is that what ill get or is the website misrepresenting the actual situation ?

It's not that simple.

Most top line forecasts will say £185.15/week.

You need to read the whole thing to see what you have already accrued (usually show to 5 April 2022 at the moment) and how much, if anything you can add to that.

Unless your starting amount, back in 2016, was greater than the standard new State Pension at that time then you will be limited to a maximum of £185.15/week.

If you exceeded the standard amount them you keep the extra but cannot add anymore.

If you earn enough you still need to pay NI even if you have already reached your personal maximum State Pension.  Which for most people will be £185.15.

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??


I have around 42/43 years on NI contributions with no gaps 

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

molerat

C_Mababejive said:

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??

As long as you are contributing NI then yes.  And if you give up working now you will only be £1.52 short of the max.

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

She did not, and you can not, "opt out" of paying NI.  Once you reach state pension age, which would have been 60 for her if born 1950 or earlier, you no longer pay NI.

C_Mababejive

molerat said:

C_Mababejive said:

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??

As long as you are contributing NI then yes.  And if you give up working now you will only be £1.52 short of the max.

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

She did not, and you can not, "opt out" of paying NI.  Once you reach state pension age, which would have been 60 for her if born 1950 or earlier, you no longer pay NI.

Thank you,, next crazy question. The £185.15 that is being quoted on the website, is this the current rate or are they saying that when i reach age 67 , i will get £185.15 ?? it doesnt seem a lot !

So when i reach state pension age of 67 i can carry on working and not pay NI?
My friend was born in 1953

kaMelo

C_Mababejive said:

molerat said:

C_Mababejive said:

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??

As long as you are contributing NI then yes.  And if you give up working now you will only be £1.52 short of the max.

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

She did not, and you can not, "opt out" of paying NI.  Once you reach state pension age, which would have been 60 for her if born 1950 or earlier, you no longer pay NI.

Thank you,, next crazy question. The £185.15 that is being quoted on the website, is this the current rate or are they saying that when i reach age 67 , i will get £185.15 ?? it doesnt seem a lot !

So when i reach state pension age of 67 i can carry on working and not pay NI?

That is the current rate as of April 2022/23, it will increase each year in line with whatever formula the Government of the day implement so will be more by the time you qualify for the the state pension in 2030

C_Mababejive

Thank you so much pensions and IFA gurus .. I shall pass on my newfound knowledge to my colleagues who are also wondering about these matters

Linton

C_Mababejive said:

molerat said:

C_Mababejive said:

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??

As long as you are contributing NI then yes.  And if you give up working now you will only be £1.52 short of the max.

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

She did not, and you can not, "opt out" of paying NI.  Once you reach state pension age, which would have been 60 for her if born 1950 or earlier, you no longer pay NI.

Thank you,, next crazy question. The £185.15 that is being quoted on the website, is this the current rate or are they saying that when i reach age 67 , i will get £185.15 ?? it doesnt seem a lot !

So when i reach state pension age of 67 i can carry on working and not pay NI?
My friend was born in 1953

Yes, when you reach your State Pension Age you can continue working and you wont be charged NI.

Dazed_and_C0nfused

C_Mababejive said:

Dazed_and_C0nfused said:

C_Mababejive said:

So to simplify, if the forecast says ill get the full state pension of £185, is that what ill get or is the website misrepresenting the actual situation ?

It's not that simple.

Most top line forecasts will say £185.15/week.

You need to read the whole thing to see what you have already accrued (usually show to 5 April 2022 at the moment) and how much, if anything you can add to that.

Unless your starting amount, back in 2016, was greater than the standard new State Pension at that time then you will be limited to a maximum of £185.15/week.

If you exceeded the standard amount them you keep the extra but cannot add anymore.

If you earn enough you still need to pay NI even if you have already reached your personal maximum State Pension.  Which for most people will be £185.15.

Hmm...so back to my forecast on the Gov website and it says,,,

Estimate based on your NI record upto 5 april 2022 ..... £178.34 pw

Forecast if you contribute another two years before 5 April 2030.....£185.15

So one of those years has already gone so by 5 April 2024 i will be fully paid up ??


I have around 42/43 years on NI contributions with no gaps 

As an aside a female friend of mine tells me that at aged 60 she was told she no longer had to pay any NI as she had paid enough and therefore opted out of NI and carried on working. She is on the previous old system ,not the new state pension ?

In a couple of weeks those figures will change to the 2023:24 rates.

So £185.15 (per week) will become £203.85.

And by May/June time your personal accrual will be updated to reflect the 2022:23 year being added.  So your personal entitlement will be ~£202.17.

One more year will add the final £1.68.

You can effectively opt out too if you wish.  You just have to earn under the relevant limit for paying National Insurance.

If you really want to play the game make sure you earn the LEL each week (£123) and then you avoid paying NI but still gain that final qualifying year you need 😄

xylophone

My friend was born in 1953

Then she didn't reach SPA at age 60.

https://commonslibrary.parliament.uk/research-briefings/cbp-7405/

If she was working and earning the relevant amount, she would have had to pay NI (or be credited with NI) up to her SPA.

She would have needed 30 qualifying years for a full Basic State Pension but up to 5/4/16, she could have been earning some S2P in addition to the basic.