Pension top up for one year

LongTermLurker

Edit - thanks all, I think I’ve hit the explanations I need 👍

Hi

It’s been a long long time since I was on here 😁 I’m coming up to 60, so will get my state pension at 67, but have already retired so won’t be working between now and then. I’ve just done a check and it’s saying I need 1 more year to get the full state pension. However, I have 40 full years showing, but I thought the requirement was 35? I was contracted out for a period if that affects it, but every year is showing “full”?

I can buy the 2021/22 year at £800, but as far as I understand things, it says I’m only £2pw short of full pension anyway, so if I paid £800 now it’d be 15 years (7 + 7.7) before I actually got that £800 back.

Am I missing something on the value of buying an extra year, and why in fact does it say I need to if I already have 40 full years?

la531983

The requirement is only 35 for anyone after 2016 starting their NI journey , anyone beforehand is on transitional arrangements, could be as low as 27/28 or as high as the 40s

QrizB

35 years is only relevant for people born this century. You'll be under "transitional arrangements" and could need less than 20 years or more than 40.

Unless there's a radical change in the UKs pension arrangements, you will be able to buy your missing year when you're 66, in time for claiming your pension at 67. You don't need to buy it now. It will still take ~7 years to pay for itself but if you're in average health you can expect to live to your mid 80s so you'll still get your money back.

Ayr_Rage

35 years is not relevant if you have a pre 2016 working history.

I am 66 and needed 48 years to get the full SP.

I'd put that £800 in a S&S ISA, you'd probably get a better overall return and who knows what'll happen to the SP by the time you are due to receive it.

LongTermLurker

Thanks all for confirming, that explains why. For 1 year, I won’t worry about it. Even if I live a long & healthy life, the extra £100+ a year I’d eventually start to accumulate wouldn’t be of any significance.

cheers 👍