Early Pension and National Insurance Contributions

FIREmenow

jimmyjazz1992 said:

FIREmenow said:

xylophone said:

 First check your forecast 

https://www.gov.uk/check-state-pension

What exactly does it say at estimate to 5/4/23?

Will the tax year just ending be a qualifying year?

How many QY did you have at 5/4/16?

And from 6/4/16 to the tax year just ending?

Hi Jimmy, sharing these items above plus your COPE amount would let xylophone and/or others here do the calculation needed to explain how your pension has been worked out.

It is a bit alien if you're not used to it - I've put some screen shots below that might help, I've just obscured personal info where you would see your birthday when you reach state pension age, name etc.

Let us know what it says in the bit highlighted purple in my picture:



If you scroll down that same page, you will see a link to get your COPE amount - click on the link as shown in yellow in the pic below:



Clicking that link sends you to a new page which will give you your COPE amount - let us know what that is:



Then, go back to your forecast and click the link to view your national insurance history, on your history page count up the years that say they are full, from when you were a nipper, right up to and including 2015 to 16 - this is how many qualifying years you have prior to 6/4/2016, which xylophone asked for - let us know that figure.

Lastly, there are two more things that your pension forecast doesn't know yet but you can estimate, which might add a further two full years to what you already have:
- for the 2023-24 tax year, which is just about to end, are you likely to get a full NI year. If you are paid monthly then if your March payslip says your NI payment total for the year to date you could tell us that to see if it's likely to be enough.
- because you are planning to retire in September of the 2024-25 tax year, you will have had 5 or 6 months of pay in that year, so might have earned enough for that to also qualify as a full year - if you are happy to tell us an estimate of what you will earn in those 5/6 months in total we can make a guess. 

Note: There is a really common misconception that everyone now needs 35 qualifying years to get the full state pension, but most people are in the transition period having worked both before and after 2016 when the new state pension came in, so everyone's calculation is different depending on their age and work history. I am a rare unicorn who actually does need 35 years on transitional rules - I have 20 now and need 15 more, but that is not the norm and you could need more or fewer years than 35. If you provide the info above someone can explain your personal calculation.

Apologies for the long post, I hope that helps a bit.

Hi there

I have only just managed to read your thorougher posting and (will need to read again). That said it is becoming clearer because of what you posted.

Hi Jimmy, glad the screenshots were helpful, you've nearly given us all the info needed, these are the last few things:

You said you will reach state pension age early in 2032 - is that date before or after 6 April? That will tell us which tax year it falls in.

When you log into your pension forecast:
What does it say in the highlighted purple bit below - this tells us how much pension you have already built up up until April 2023:



Depending on those two things, you might not need to tell us anything else and the 'troubling' year might not matter.

Perhaps if everyone waits now until you next come back and answer those two questions and then once all the information is laid out, someone will be able to explain what it all means.

Thanks for keeping at it - nearly sorted now 

jimmyjazz1992

Hi there and thanks for your patience . I have been up and down the country looking after a sick relative.

'You said you will reach state pension age early in 2032 - is that date before or after 6 April?' Answer is - Before

As for the other bit, this is all that is written when I look where FIREmenow told me to look...

You can get your State Pension on ******* 2032

Your forecast is £221.20 a week, £961.83 a month, £11,541.90 a year

Your forecast

• is not a guarantee and is based on the current law
• is based on your National Insurance record up to 5 April 2023
• does not include any increase due to inflation

£221.20 is the most you can get

You cannot improve your forecast any more.

If you’re working you may still need to pay National Insurance contributions until ******* as they fund other state benefits and the NHS.

View your National Insurance record

Your forecast may be different if there are any changes to your National Insurance information.

Hope that is ok?

xylophone

https://www.gov.uk/new-state-pension/what-youll-get

You have achieved a full NSP.

You will be still be paying NI at the moment (although it will not improve your pension) and up to your leaving and taking your pension  later this year.

You do not pay NI on your pension income.

The  state pension will increase each year under the "triple lock" (as the law stands at the moment).

https://www.moneyhelper.org.uk/en/blog/retirement/state-pension-triple-lock

jimmyjazz1992

Many thanks everyone for your information and patience!