Query about "full year" NI ... when I was at school in the late 70s

mrodent33

I'm 63 and have downloaded my NI insurance record from HMRC. 

I've been paying myself (from my micro-company) the LEL (or more) since 1989, except for one year, so assumed I was nearing the 35 years. In fact it shows 37 years of "Full year" and the summary page for me says

"£221.20 is the most you can get ...You cannot improve your forecast any more." I.e. it appears that I have already qualified for the full State pension.

This is quite a nice surprise, so I looked at the record. It says, that for 1976-77, 1977-78 and 1978-79, I have "Full year". I was at secondary school during the first 2 of those years and most of the 3rd. I never had a weekend job or summer job, so I'm struggling to understand how I might have qualified for NI! Could it be that my parents paid? During the last year I did absolutely minimal crappy jobs for temping agencies, as I recall. I'd be amazed if I paid enough NI in 1978-79, although it's not technically impossible.

This is actually fairly important for me to get clarify on due to my financial and other circumstances. I recently received several 00s of 000s of £ due to an inheritance. Most of this is sitting in GIA accounts (non-tax-sheltered) ... at the same time I run my own micro-company. So in fact I'm thinking of not paying myself any wage at all this year. But instead cashing in some GIA gains and then lending my company £60k so it can make the maximum "director's SIPP contribution". (A director's SIPP contribution is capped at £60k regardless of the director's actual wage).

I'm sort of concerned to take any such actions well before the October budget, where there are likely to be changes to CGT.

Has HMRC ever been known to make mistakes about this kind of thing? Or maybe someone can think of an explanation for those contributions when I was at school?

mrodent33

*** get "clarity"

PS my parents are both dead

hugheskevi

Read about starter credits at this link.

mrodent33

Got it. Thanks for the explanation.

Dazed_and_C0nfused

Not sure why you think 35 years is of any relevance to you?

You seem to have missed the fact that you are under transitional rules.

Won't change anything but you are definitely under a misapprehension there.

mrodent33

"Not sure why you think 35 years is of any relevance to you?"

I thought males born after 1951 had to have 35 years of full contributions. There are multiple sites out there which talk of 35 years of contributions.

I just search on "transitional rules", which I'd never heard of. 

From here I find "You’ll need 10 qualifying years on your National Insurance record to get any new State Pension." I presume that's what you're referring to?

eskbanker

mrodent33 said:

"Not sure why you think 35 years is of any relevance to you?"

I thought males born after 1951 had to have 35 years of full contributions. There are multiple sites out there which talk of 35 years of contributions.

I just search on "transitional rules", which I'd never heard of. 

From here I find "You’ll need 10 qualifying years on your National Insurance record to get any new State Pension." I presume that's what you're referring to?

You need to read such sites carefully, such as the one you refer to:

If your National Insurance record started after April 2016

If your National Insurance record started after April 2016 you will need 35 qualifying years to get the full rate of new State Pension.

In other words, 35 years is only relevant to those born this century....

p00hsticks

mrodent33 said:

"Not sure why you think 35 years is of any relevance to you?"

I thought males born after 1951 had to have 35 years of full contributions. There are multiple sites out there which talk of 35 years of contributions.

I just search on "transitional rules", which I'd never heard of. 

From here I find "You’ll need 10 qualifying years on your National Insurance record to get any new State Pension." I presume that's what you're referring to?

There are a lot of lazy journalists out there (and sometimes people who don't correctly read what is being said).  . 

The '35 years for a full new State Pension' rule only applies to those who were born this century (and so whose working lives fall entirely under the new scheme). 

Those of us born earlier who also had NI contributions prior to April 6th 2016 fall under transitional rules and so may need more or less than 35 years to reach the new maximum depending on our individual NI records - whether we were contracted in or out etc. Some may even have reached over the new maximum at 2016, and in such cases this amount is protected. 

The relevant gov.uk page The new State Pension: What you'll get - GOV.UK (www.gov.uk)
has this to say on the subject 

If you’re getting less than £221.20 a week

You might need more National Insurance qualifying years to increase your State Pension.

If your National Insurance record started before April 2016

You may have been contracted out. While you were contracted out, you or your employer paid more into your workplace or private pension and less into your State Pension.

If you were contracted out, you will usually need more than 35 qualifying years to get the full rate of new State Pension.

If your National Insurance record started after April 2016

If your National Insurance record started after April 2016 you will need 35 qualifying years to get the full rate of new State Pension.

If you’re getting more than £221.20 a week

If you paid into the Additional State Pension before 2016 and would have got more State Pension under the old rules, you’ll get a ‘protected payment’. This is paid on top of the full rate of new State Pension.

Dazed_and_C0nfused

You might find these worth a read, in particular the If your National Insurance record started before April 2016 section on gov.uk.

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

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs19_state_pension_fcs.pdf&ved=2ahUKEwjt8e7WoruIAxVXQ0EAHVo4GkgQFnoECCEQAQ&usg=AOvVaw250FoThvfD_U8QVfUxSA1N

mrodent33

Thanks to all. Thorny subject. I (obviously) haven't seen the need to look into it before.

Yes, well, I was never "contracted out" (and have no idea what that means - I've never been much involved with the world of real jobs)... and the HMRC State pension summary has me down as qualified for Full Pension ... and I now understand why those years at school were "Full years". So my question has been answered.