Boosting your state pension should now be quicker and easier as new online tool launches

molerat

Devonjem said:

Hello - am I correct to think that as my forecast is £225.04/week then making voluntary contributions (there are 6 years available for me to buy) will not increase that figure as it is already above the current maximum basic weekly figure of £221.20?  thanks

Post 2016 years cannot add to the pension but if you have less than 30 pre 2016 years then there is a possibility of increasing the amount.  Your forecast will clearly state if you can increase the amount.

Devonjem

Thanks for the reply.  As the years available to purchase are post 2016 then it looks like I cannot increase my pension.

Doctor_Who

Sea_Shell said:

pinnks said:

Sea_Shell said:

pinnks said:

Just because you fall foul of that question, doesn't mean you can't use the service, it just means you need to look carefully at what it says.

Are you replying to me?

Really?   I thought it meant I had to ring up and couldn't use the online payment system.

That seems to be the message/impression it gave.

Have I misunderstood?

Yes, I was replying to you.  Doctor_Who pretty-much answered your comment for me.  I am not sure what the real difference is between the first 2 options about stopping paying NI when wanting to fill gaps but they seem to be aimed at when you plan to stop paying any type of NI, including voluntary payments.  Poorly worded in my view as that is at least 3 people in this discussion (myself included) that have struggled with which option to chose.

Tempting to buy those two "discounted" years, but conscious of the fact that I am only 52, and their might be a bus with my name on it!!   Ever the optimist!! 

I'm a bit older than you and decided to buy my two current missing years whilst they are available at a 'discount'. Yes, the unforeseen may happen, but odds are that you'll at least recover what you paid and likely a lot more. Once you understand what the online system is trying to do, and the figures it presents, then it's fairly simple. I paid for my two missing years last Friday and this morning they are showing as 'full' in my NI record and my state pension forecast has been correctly updated. I'll need to decide whether to pay for future missing years at some point, but complications like fiscal drag and Scottish tax bands will make paying for these years less attractive.

Oysterseeker

Doctor_Who said:

molerat said:

Penguin69 said:

I've successfully managed to top up one year that cost me £77 and has given me more than £12 per week benefit. I eventually managed to negotiate the HMRC website having had to fib about when I intend to stop paying NIC. I chose the option that says I will stop paying NIC before my state pension age and declared it to be next year. With that done I was offered 3 options, of which the first was what I wanted. I was then able to authorise the payment by being redirected to my bank account and all went remarkably smoothly! So huge well done MSE and a massive thank you!

How did one year give £12, that's not possible ?

I've checked my two missing years using the new online system - it says that paying for one year will increase the weekly pension by £12.64 and paying for two years increases it by £18.96. My calculations show that paying for one year should add £6.32 to the weekly pension, hence it looks like the online system is somehow adding an extra year (maybe 2023-24 or 2024-25). I've just phoned the Future Pensions Centre and they said my calculations are correct!

I saw similar after fibbing and saying I was going to stop paying NI when in fact I think I have stopped...well the plan anyway. So you were told the figures were incorrect!! That's hugely important. Did they say then that if you paid for 23/24 you wouldn't get £12.64 even though it said so?
I couldn't understand how the more years I bought the less increase I got per year when it states all years equal. Very confusing!

molerat

I couldn't understand how the more years I bought the less increase I got per year when it states all years equal. Very confusing!

All years are not equal, all (full value) post 2016 years are worth £6.32 but a pre 2016 year can be worth £6.32, £5.65 or £0.00. An even more complicated effect on the bottom line is if a pre 2016 year switches your starting amount from old to new.

Doctor_Who

Oysterseeker said:

Doctor_Who said:

molerat said:

Penguin69 said:

I've successfully managed to top up one year that cost me £77 and has given me more than £12 per week benefit. I eventually managed to negotiate the HMRC website having had to fib about when I intend to stop paying NIC. I chose the option that says I will stop paying NIC before my state pension age and declared it to be next year. With that done I was offered 3 options, of which the first was what I wanted. I was then able to authorise the payment by being redirected to my bank account and all went remarkably smoothly! So huge well done MSE and a massive thank you!

How did one year give £12, that's not possible ?

I've checked my two missing years using the new online system - it says that paying for one year will increase the weekly pension by £12.64 and paying for two years increases it by £18.96. My calculations show that paying for one year should add £6.32 to the weekly pension, hence it looks like the online system is somehow adding an extra year (maybe 2023-24 or 2024-25). I've just phoned the Future Pensions Centre and they said my calculations are correct!

I saw similar after fibbing and saying I was going to stop paying NI when in fact I think I have stopped...well the plan anyway. So you were told the figures were incorrect!! That's hugely important. Did they say then that if you paid for 23/24 you wouldn't get £12.64 even though it said so?
I couldn't understand how the more years I bought the less increase I got per year when it states all years equal. Very confusing!

The Future Pensions Centre told me (correctly in my opinion) that paying for 1 year (either 2021-22 or 2022-23) would increase my pension by £6.32 per week. I went back and used the online system to buy both missing years and within a week my NI record had been updated and my SP forecast increased by £12.64 a week, so all is good. I think the issue is that the figures quoted by the online system assume that you will continue to pay NI for all available future years and it includes this in the pension increase figure along with the voluntary contribution. Whilst this is technically correct it would be easier to understand if the online system split the pension increase between what the voluntary contribution adds now and what continuing to work (or NI credits/future voluntary contributions) may add in the future.

pinnks

That is indeed what the system is doing because you told it that you would continue paying NI until you reach pension age.  As 2023/24 is also available to you (as it is to me, as I reach pension age in this tax year), then that additional £6.32 is also up for grabs.

That said, I agree with you that the system could make things much, much, clearer in this (and other) area(s).  The lack of satisfactory explanation caused you to pick up the phone, meaning the service has saved virtually zero resources because of poor design.
 

Oysterseeker

I told it I would continue paying NI until now, i e. May 2024. I wouldn't have paid enough for 2024/25 to count I don't think just for April and May if I was paying and yet it still says extra £12.64 for just filling gap of 2020/21. It's saying I could get to my maximum with the 30 years I have and filling 7 years. I was contracted out most of contributing years 

Browntoa

Anyone else get to the point where you can pay online by connecting to your bank but it then fails 

Doctor_Who

Browntoa said:

Anyone else get to the point where you can pay online by connecting to your bank but it then fails 

It worked for me a week or so ago when I paid for 2 years. I bank with Santander.