State Pension Contributions

Tezzaahh

I started work at 16 and am now 52. I have paid in my full 35 years contributions for the state pension. If I continue to work till 68 or 69 or 80 (sarcasm on UK Government) then I would have paid in an additional 17 or 18 years. Is this fair? Do I have any choices here?

This excert from the BBC News website prior to todays budget prompted my thoughts on this.

Thank you for any advice   

The chancellor is expected to confirm that the state pension in April will rise in line with average wages.

That would mean:

• The new flat-rate state pension - for those who reached state pension age after April 2016 - will increase to £241.30 a week, or £12,547.60 a year, a rise of £574.60
• The old basic state pension - for those who reached state pension age before April 2016 - will go up to £184.90 a week, or £9,614.80 a year, a rise of £439.40

In general, you need 35 years of qualifying contributions to get a full state pension.

This brings the state pension closer to being subject to income tax - a source of some debate.

la531983

National Insurance doesnt just fund "your" pension.

So yes, its perfectly fair.

Exodi

Yes you need 35 qualifying years to receive the new full state pension, but I think you're looking at it particularly negatively.

Based on someone starting work at 18 and retiring at 68, it's obvious that people will have more working years than required to achieve the full state pension. I'd imagine this is by design.

Very few people will be able to work exactly the minimum amount required to be eligible for the full state pension.

As to your question of 'is it fair' - that is subjective. Most people do not primarily choose to work to increase their state pension entitlement - most primarily work because it pays them money which they can use to cover bills or spend. And remember, despite what often gets thrown about, you don't need to be in employment to gain national insurance contributions - you can gain them while unemployed too. Building your national insurance record is just a convenient offshoot of something most people would do regardless.

To your second question, you do have choices - stop working, then you won't need to pay any more NI.

Despite feeling like you're hard done by and the majority of people facing the reality they will work for ~50 years despite only needing 35 for the full state pension entitlement, the majority of pensioners have ended up being net beneficiaries of the pension system (that is, they take out more than they ever put in).

GrubbyGirl_2

National insurance contributions don't just fund pensions, they also fund other benefits - they basically fund the welfare state.  

Exodi

Also noticed this is in the wrong subforum.

Reported to move to Pensions, annuities & retirement planning

QrizB

Tezzaahh said:

I started work at 16 and am now 52. I have paid in my full 35 years contributions for the state pension. 

There is no "full" 35 years for anyone older than 25. You might need 40 or more years.

Have you checked your forecast?

https://www.gov.uk/check-state-pension

Tezzaahh said:

Is this fair?

National Insurance is a tax on earned income. It's not a payment into a pension fund. It's as fair as any other tax.

Tezzaahh said:

Do I have any choices here?

You can reduce your hours (and/or change your job) so you earn less than £242 a week, at which point you'll stop paying NI.

dunstonh

Board admin has gone daft and removed posts giving choices, calling them abusive.   They were not abusive. They were a valid choice, and many people make them.   It is strange how valid choices could be considered abusive.

HedgehogRulez

dunstonh said:

Board admin has gone daft and removed posts giving choices, calling them abusive.   They were not abusive. They were a valid choice, and many people make them.   It is strange how valid choices could be considered abusive.

That’s what an abuser would say…. 🤔