Can final year of NI contributions qualify for state pension?

tichtich

Hi. I'm self-employed and reaching SRA in March 2024, so within this financial year. As I understand it, I will have to pay class 2 NI contributions for most of the year and class 4 contributions on my income for the whole year. But no matter what I pay, the year won't count as a qualifying year towards state pension. Is that correct? (I have only 31 qualifying years and I've already bought all the back years I can, so I need every year I can get!)

Dazed_and_C0nfused

You're correct.

But as you under transitional rules the number of years itself isn't what counts.

You could have 31 and get £185.15.  Or have 41+ and not get £185.15.

How much have you accrued to date?

molerat

No, the year in which you reach SPA is not a relevant year for calculating state pension entitlement.

tichtich

Thanks for the reply. My HMRC state pension summary page says:

Forecast if you contribute until 5 April 2023: £150.56 a week
£150.56 is the most you can get

This seems pretty conclusive that the answer to my question is No. But I thought I'd ask anyway, just to be sure! It seemed unfair that I have to pay NI contributions in my last year with no benefit. But I guess anyone who has already accrued the full state pension is in the same boat. It just goes to underline the fact that NI is more of a tax than an insurance/pension scheme.

Thanks.

jem16

tichtich said:

Thanks for the reply. My HMRC state pension summary page says:

Forecast if you contribute until 5 April 2023: £150.56 a week
£150.56 is the most you can get

This seems pretty conclusive that the answer to my question is No. But I thought I'd ask anyway, just to be sure! It seemed unfair that I have to pay NI contributions in my last year with no benefit. But I guess anyone who has already accrued the full state pension is in the same boat. It just goes to underline the fact that NI is more of a tax than an insurance/pension scheme.

Thanks.

Just be careful with that as I thought like you until I helped someone recently with their voluntary NICs. Their forecast told them that around £160pw was the most that they could get. However their NI record showed gaps from 2015 onwards which they could fill and it would increase their pension.

I can only assume it was because some of the years were saying "We're checking this year" but it was most odd and not something I've encountered before.

tichtich

jem16 said:

tichtich said:

Thanks for the reply. My HMRC state pension summary page says:

Forecast if you contribute until 5 April 2023: £150.56 a week
£150.56 is the most you can get

This seems pretty conclusive that the answer to my question is No. But I thought I'd ask anyway, just to be sure! It seemed unfair that I have to pay NI contributions in my last year with no benefit. But I guess anyone who has already accrued the full state pension is in the same boat. It just goes to underline the fact that NI is more of a tax than an insurance/pension scheme.

Thanks.

Just be careful with that as I thought like you until I helped someone recently with their voluntary NICs. Their forecast told them that around £160pw was the most that they could get. However their NI record showed gaps from 2015 onwards which they could fill and it would increase their pension.

I can only assume it was because some of the years were saying "We're checking this year" but it was most odd and not something I've encountered before.

Thanks, but I know I can't fill any more gaps. I made full use of the special 2016 switchover rules. I think I bought 7 or 8 back years at that time. 

Dazed_and_C0nfused

Not much consolation but if you check again in a week or so you'll at least have the pleasure of seeing your £150.56 become £165.76 from the triple lock increase 😃

tichtich

Dazed_and_C0nfused said:

Not much consolation but if you check again in a week or so you'll at least have the pleasure of seeing your £150.56 become £165.76 from the triple lock increase 😃

I was wondering whether it included the latest increase. It's some consolation to know that it doesn't. (I haven't provided very well for my retirement, so every little counts!)

Dazed_and_C0nfused

Mine still shows the £185.15 rate so I think your £150 is without the April 2023 increase.

pinnks

I just checked mine and it is still showing the £185.15 rate.  Normally updates quite soon after 5 April but as it doesn't really matter, best to just wait and watch...