State Pension - buying NI credits for missing years

Muttleythefrog

Hello!

Query for the pension experts. I've read Martin's guide on buying NI credit for missing years but it seems to assume people's record begins aged 16.

My wife is 50, Mexican, came to the UK from Mexico in 2015 and is now a British national also.
She has never worked in the UK and is my carer. Currently she gets NI credits due to receipt of Universal Credit but will get them due to Carer's Allowance in the near future as we soon will lose entitlement to income related benefits. I am assuming she will get NI credits for the remainder of her working age life one way or another.

Her online government account shows the following information:

You can get your State Pension 2041

Your forecast is £120.08 a week

is not a guarantee and is based on the current law

is based on your National Insurance record up to 5 April 2024

assumes that you’ll contribute another 17 years

does not include any increase due to inflation

You currently have 2 years on your record and you need at least 10 years to get any State Pension.

2024 to 2025 Your record for this year is not available yet

2021 to 2022 Year is not full 

2020 to 2021 Year is not full 

2019 to 2020 Year is not full 

2018 to 2019 Year is not full

2017 to 2018 Year is not full

2016 to 2017 Year is not full 

2015 to 2016 Year is not full

Gaps Cost of filling gaps

2021 to 2022 £15.40

2020 to 2021 £795.60

2019 to 2020 £824.20

2018 to 2019 £824.20

2017 to 2018 £824.20

2016 to 2017 £824.20

2015 to 2016 £824.20

My questions:

1. Am I right in saying it makes sense to buy up the credit for these years available unless she expects to die before 3 years after retirement age?

2. Martin's guide suggest credits can currently, until April 2025, be bought up for as far back as 2006. Am I right in saying it won't be possible in this case as she did not live in the UK until 2015?

3. If I were to die before her she may choose to retire to native Mexico. Am I right is saying she can get her British state pension out there but that it would not increase as standard (such as via inflation) if out of the country?

4. I see reference to issues of more than 35 years being required to get full pension due to overlap with old system. Do I only need to consider the current (or any future if then applicable) pension regime?

Any other advice welcome. Kind regards!

molerat

1) Maybe, maybe not.  Pension credit could come in to play and your income as a couple would be considered https://www.gov.uk/pension-credit/eligibility  This could be worth way more than the amount of pension purchased but could be negated by 3)

2) Correct, she can not fill gaps prior to her arrival in UK.

3) Yes she can receive her pension abroad.  Pension increases (or not) are dependent on the particular location. Mexico is not on the list so will not increase https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

4) As her NI record only starts from just before the inception of the 2016 pension she would effectively need 35 years - her starting amount (if that year were purchased) would be the equivalent of 1 year new rate so would need another 34 but obviously cannot get that amount.  More than 35 is required by those with a pre 2016 contracted out history, those not contracted out can often need less than 35.

Quite interesting that there is a pension forecast when currently she has no entitlement, unusual.

Muttleythefrog

molerat said:

1) Maybe, maybe not.  Pension credit could come in to play and your income as a couple would be considered https://www.gov.uk/pension-credit/eligibility  This could be worth way more than the amount of pension purchased but could be negated by 3)

2) Correct, she can not fill gaps prior to her arrival in UK.

3) Yes she can receive her pension abroad.  Pension increases (or not) are dependent on the particular location. Mexico is not on the list so will not increase https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

4) As her NI record only starts from just before the inception of the 2016 pension she would effectively need 35 years - her starting amount (if that year were purchased) would be the equivalent of 1 year new rate so would need another 34 but obviously cannot get that amount.  More than 35 is required by those with a pre 2016 contracted out history, those not contracted out can often need less than 35.

Quite interesting that there is a pension forecast when currently she has no entitlement, unusual.

Thank you very much for that... really useful. I had considered the issue of pension credit (or some equivalent that may be in play at retirement age) but I'm sort of discounting it as means testing for any benefit is likely to become a no go soon with inheritance and stay that way (a quick calculation on purely pension income suggests as a couple we'd likely just miss out on PC if the criteria did comparably inflate and those 7 incomplete NI years remained so).

Your advice makes sense... and yes... perhaps a bit surprising they give a forecast so long before any entitlement.

Dazed_and_C0nfused

molerat said:

1) Maybe, maybe not.  Pension credit could come in to play and your income as a couple would be considered https://www.gov.uk/pension-credit/eligibility  This could be worth way more than the amount of pension purchased but could be negated by 3)

2) Correct, she can not fill gaps prior to her arrival in UK.

3) Yes she can receive her pension abroad.  Pension increases (or not) are dependent on the particular location. Mexico is not on the list so will not increase https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

4) As her NI record only starts from just before the inception of the 2016 pension she would effectively need 35 years - her starting amount (if that year were purchased) would be the equivalent of 1 year new rate so would need another 34 but obviously cannot get that amount.  More than 35 is required by those with a pre 2016 contracted out history, those not contracted out can often need less than 35.

Quite interesting that there is a pension forecast when currently she has no entitlement, unusual.

Maybe the forecast is available because she would come under transitional rules by buying 2015-16?

Muttleythefrog

Dazed_and_C0nfused said:

molerat said:

1) Maybe, maybe not.  Pension credit could come in to play and your income as a couple would be considered https://www.gov.uk/pension-credit/eligibility  This could be worth way more than the amount of pension purchased but could be negated by 3)

2) Correct, she can not fill gaps prior to her arrival in UK.

3) Yes she can receive her pension abroad.  Pension increases (or not) are dependent on the particular location. Mexico is not on the list so will not increase https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

4) As her NI record only starts from just before the inception of the 2016 pension she would effectively need 35 years - her starting amount (if that year were purchased) would be the equivalent of 1 year new rate so would need another 34 but obviously cannot get that amount.  More than 35 is required by those with a pre 2016 contracted out history, those not contracted out can often need less than 35.

Quite interesting that there is a pension forecast when currently she has no entitlement, unusual.

Maybe the forecast is available because she would come under transitional rules by buying 2015-16?

Trying to understand the impact of that... any ideas welcome.! I presume no real impact as no contracting out.

Dazed_and_C0nfused

Muttleythefrog said:

Dazed_and_C0nfused said:

molerat said:

1) Maybe, maybe not.  Pension credit could come in to play and your income as a couple would be considered https://www.gov.uk/pension-credit/eligibility  This could be worth way more than the amount of pension purchased but could be negated by 3)

2) Correct, she can not fill gaps prior to her arrival in UK.

3) Yes she can receive her pension abroad.  Pension increases (or not) are dependent on the particular location. Mexico is not on the list so will not increase https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

4) As her NI record only starts from just before the inception of the 2016 pension she would effectively need 35 years - her starting amount (if that year were purchased) would be the equivalent of 1 year new rate so would need another 34 but obviously cannot get that amount.  More than 35 is required by those with a pre 2016 contracted out history, those not contracted out can often need less than 35.

Quite interesting that there is a pension forecast when currently she has no entitlement, unusual.

Maybe the forecast is available because she would come under transitional rules by buying 2015-16?

Trying to understand the impact of that... any ideas welcome.! I presume no real impact as no contracting out.

Not really no. 

I suspect that buying 2015-16 (which falls under the old State Pension system) could well mean the 10 year minimum under the new system is no longer a factor for her that's all.