Effect of contracting out of state pension

Trying2retire

Hello

I am 59. I have 39 years of qualifying NI contributions according to my online record.  My State Pension forecast shows a full State Pension at 67.  It also says the forecast is based on my contributions to end March 2024.
BUT  I have finished working (so no more NI contributions by employer) and I have a COPE amount of £39.20 pw.  I was contracted out for 7 years between 1993 and 2000.
1.  Does this mean that I only have 32 qualifying years (ie 39 years less the 7 years contracted out)?
2.  Will my state pension be reduced by 3/35ths?
3.  Should I try to make up 3 years NI contributions before state pension age to get a full state pension (based on current legislation)?

la531983

If it says its full, its full.

DRS1

Trying2retire said:

Hello

I am 59. I have 39 years of qualifying NI contributions according to my online record.  My State Pension forecast shows a full State Pension at 67.  It also says the forecast is based on my contributions to end March 2024.
BUT  I have finished working (so no more NI contributions by employer) and I have a COPE amount of £39.20 pw.  I was contracted out for 7 years between 1993 and 2000.
1.  Does this mean that I only have 32 qualifying years (ie 39 years less the 7 years contracted out)? NO
2.  Will my state pension be reduced by 3/35ths? NO
3.  Should I try to make up 3 years NI contributions before state pension age to get a full state pension (based on current legislation)? Hell NO

See answers in bold

Aretnap

Your state pension forecast already takes into account the effects of contracted out years. If it says that you will get a full state pension then you will get a full state pension, barring new legislation which completely changes the basis on which state pensions are calculated (which is unlikely but not impossible - hence the fact that it's branded as a forecast and not a guarantee).

Also look for words like "this is the most you can get - you cannot increase your forecast further" - if it says this then there is definitely no point buying additional years.

eskbanker

Trying2retire said:

3.  Should I try to make up 3 years NI contributions before state pension age to get a full state pension (based on current legislation)?

Are you under the mistaken impression that you need 35 years?

xylophone

Your forecast shows  "estimate to 5/4/24" as full NSP?

Does it also say that you cannot improve your forecast any more?

https://forums.moneysavingexpert.com/discussion/6595544/full-state-pension-and-ni-contributions

Aretnap

eskbanker said:

Trying2retire said:

3.  Should I try to make up 3 years NI contributions before state pension age to get a full state pension (based on current legislation)?

Are you under the mistaken impression that you need 35 years?

An important point! The oft-quoted "rule" that you need 35 years for a full state pension applies only if you have spent your entire working life under the new (post 2016) system. Basically it is only relevant if you were born this century.

We 20th century leftovers are under transitional arrangements which means that the number of years we need for a full state pension depends on our earnings while we were working, out contracted out history, how many years pre- and post-2016 we have etc. it could be anywhere from <30 to >40. If it happens to be 35 it is purely by coincidence.

molerat

Anyone with 30 pre 2016 years, contracted in or out, and 9 post 2016 years will get the full pension.  With 8 post 2016 years an S2P of a mere 77p would be needed to ensure a full pension with 30+ pre 2016 years.

Trying2retire

Thanks so much to everyone.  This is the most useful information I've been able to glean in months!