National Insurance gaps - confusing advice from HMRC

pinnks

I always get the wife to go through security and then give the phone to me to have the discussions with whomsoever on this type of issue - just one of my jobs in the partnership, lol

xylophone

See the chart on P6 here

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

Was your wife' "starting amount" based on the old or new system?

byngga

xylophone said:

See the chart on P6 here

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

Was your wife' "starting amount" based on the old or new system?

I've not heard that mentioned before. How do we check it?

molerat

byngga said:

xylophone said:

See the chart on P6 here

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

Was your wife' "starting amount" based on the old or new system?

I've not heard that mentioned before. How do we check it?

It is a case of number crunching but If you post up the details from her forecast someone here will check it.

Current weekly £££.pp amount accrued up to April 2022 (or 2023 as some have been updated)
Number of pre 2016 NI years full
Number of post 2016 NI years full
Any COPE amount shown, in a click link in "You've been in a contracted-out pension scheme" if there is one.

byngga

I have added some screenshots below.

She was born in 1970, so is definitely on the new system.

It does mention that she has been in a "contracted-out pension scheme" (I'd not noticed that before).

She has 30 full years from 1985-1986  to  2014-2015 (inclusive)

Missing amounts are :-

2015-2016 £253.60

2016-2017 £824.20

2017-2018 £824.20

2018-2019 £665.70

2019-2020 £824.20

2020-2021 £550.80

2021-2022 £585.20

She wants to plug the partially paid year 2015-2016 but was told that because 2015/2016 was over 6 years ago she is not able to fill that gap.

jem16

byngga said:

I have added some screenshots below.

She was born in 1970, so is definitely on the new system.

It does mention that she has been in a "contracted-out pension scheme" (I'd not noticed that before).

She has 30 full years from 1985-1986  to  2014-2015 (inclusive)

Missing amounts are :-

2015-2016 £253.60

2016-2017 £824.20

2017-2018 £824.20

2018-2019 £665.70

2019-2020 £824.20

2020-2021 £550.80

2021-2022 £585.20

She wants to plug the partially paid year 2015-2016 but was told that because 2015/2016 was over 6 years ago she is not able to fill that gap.

How much is her COPE? 

She's still able to fill 2015/16 until April 2025. However it may not increase her pension depending on her COPE figure. Are you sure that was not what you were told rather than you couldn't fill it at all?

byngga

jem16 said:

byngga said:

I have added some screenshots below.

She was born in 1970, so is definitely on the new system.

It does mention that she has been in a "contracted-out pension scheme" (I'd not noticed that before).

She has 30 full years from 1985-1986  to  2014-2015 (inclusive)

Missing amounts are :-

2015-2016 £253.60

2016-2017 £824.20

2017-2018 £824.20

2018-2019 £665.70

2019-2020 £824.20

2020-2021 £550.80

2021-2022 £585.20

She wants to plug the partially paid year 2015-2016 but was told that because 2015/2016 was over 6 years ago she is not able to fill that gap.

How much is her COPE? 

She's still able to fill 2015/16 until April 2025. However it may not increase her pension depending on her COPE figure. Are you sure that was not what you were told rather than you couldn't fill it at all?

The COPE estimate is showing as £12.31 a week.

I wasn't on the call but my wife relayed back to me that the adviser had said about 2015/16 being over 6 years ago so she couldn't fill that one.  She didn't mention anything about COPE (as far as my wife remembers).

molerat

Her 2016 starting amount is based on the old rules so 15-16 will not add to her pension.

Being beyond 6 years is irrelevant and either misheard or the advisor has been drafted in from elsewhere and reading the basic script without looking at the additional points.

byngga

molerat said:

Her 2016 starting amount is based on the old rules so 15-16 will not add to her pension.

Being beyond 6 years is irrelevant and either misheard or the advisor has been drafted in from elsewhere and reading the basic script without looking at the additional points.

We will give them a call back sometime.

Can you clarify what you mean by "Her 2016 starting amount is based on the old rules so 15-16 will not add to her pension."  What does that mean exactly?  I'd imagined that filling any partially paid year would count the same.

p00hsticks

byngga said:

molerat said:

Her 2016 starting amount is based on the old rules so 15-16 will not add to her pension.

Being beyond 6 years is irrelevant and either misheard or the advisor has been drafted in from elsewhere and reading the basic script without looking at the additional points.

We will give them a call back sometime.

Can you clarify what you mean by "Her 2016 starting amount is based on the old rules so 15-16 will not add to her pension."  What does that mean exactly?  I'd imagined that filling any partially paid year would count the same.

When the new State Pension was introduced in 2016, two calculations of our entitlement were done for each of us, one under the old rules and one under the new. The higher of the two became our 'starting amount', and after that point, any NI years going forward add 1/35th of the new State Pension maximum amount (currently £203.85) to that amount until the maximum is reached. 

@xylophone often posts the exact calculations, but briefly;

The old ('basic state pension') rules used a maximum of 30 NI years in the calculation - anything more wouldn't increase the basic amount (although if you were contracted in it might have built up some extra additional SERPS/S2P). 

The new used 35 years - but to allow for the fact that prior to 2016 people paid different rates of NI depending on whether they were contracted in or out of SERPS/S2P, the calculation deducts a 'Contracted Out Pension Equivalent' or COPE amount - you can see what your is in your State Pension forecast if you click on the link where it tells you you have been contracted out at some point in the past.  

@molerat has apparently developed a clever spreadsheet that enables them  to plug the numbers from a forecast in and determine whether the starting amount was derived from the old or new rules, and whether filling pre-2016 years would alter the starting amount at all.

It sounds as if in your wife's case her starting amount is that from the old rules, and therefore as she already has 30 pre-2016 years, buying another one wouldn't increase it.