The State Retirement Pension and extra NICs

Simple_Soul wrote: »

I did not know this. Are you sure it is correct?

Are you saying that, if someone did not have enough years left before reaching SP age to make sufficient NI contributions to get the full nSP, they can pay pre-2016/17 years as voluntary NICs, even though they already have 30 qualifying years and their starting amount was based on the old SP?

I am saying that in some cases where the old rules calculation applies at April 2016, and is based on 30 (to 34 years) at April 2016, and you don't have enough post April 2016 years to get up to the full new state pension, buying missing pre April 2016 years can be viable, but not in the generality.

The relevant scenario is where the new rules calculation is close, but less than the old rules calculation in the starting amount calculation but adding one or more years into the calculation switches the result around to the new rules calculation biting.

Adding an extra year doesn't increase the old rules calculation in the starting amount calculation when 30 years has already been reached at April 2016 of course. But it does increase the new rules calculation in the starting amount calculation when there are less than 35 qualifying years, as that is based on up to 35 years counting.

In my example the starting amount might have been calculated as

Old rules: 30/30 x 119.30 + 0.70 (additional pension) = 120
New rules: 30/35 x 155.65 - 14.41 (COPE) = 119

Buying a missing pre April 2016 year changes this to

Old rules: 30/30 x 119.30 + 0.70 = 120 (same years count)
New rules: 31/35 x 155.65 - 14.41 = 123.45 (extra year counts)

So the starting amount increases from £120pw to £123.45pw based on buying a single missing pre April 2016 year.

If there are 5 post April 2016 years to add then the eventual state pension increases from about £142.25pw (120 + 4.45 x 5) to £145.70pw (120 + 4.45 x5). Where 4.45 = 155.65/35.

So in this case there is value in buying a missing pre April 2016 year even though the starting amount is initially based on the old rules calculation and 30 years up to April 2016.

All figures in 2016/2017 terms.

If in this example there were say 3 missing in time pre April 2016 years, then it's potentially a big opportunity missed in not purchasing those years. Easy to miss, try the Royal London flowchart and see if this scenario is picked up or not.

Oh dear. As a disabled person looking after my kids I've been in and out of work over the years & have many gaps in my record. At regular intervals over at least the last 15 years I've been in touch with HMRC to find out just what the gaps were and how I could fill them in. HMRC have always taken my details and promised to get back to me, and not once have they done so. I've done many follow-up calls, all to no avail.

Recently the NI contributions website was launched, and yes it shows gaps in my record, some quite small e.g. 42 weeks were paid in some years, only needing a topup of 10 weeks to count as a full year.

Oddly, one year (2013-14) shows I made 82 weeks of NI contributions in that year.

However I can't top up anything more than 6 years ago.

Do i have a case for complaining that I've been denied the chance to top up gaps for the years I've been in contact with HMRC on this issue? (i.e. from 15 to 6 years ago)?

Have you obtained a new state pension statement?

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

https://www.royallondon.com/global/documents/goodwithyourmoney/topping-up-your-state-pension-guide.pdf

xylophone wrote: »

Have you obtained a new state pension statement?
https://www.gov.uk/check-state-pension
https://www.royallondon.com/global/documents/goodwithyourmoney/topping-up-your-state-pension-guide.pdf

Yes, I've got that info thanks. Thanks too for the linky to Steve Webb's guide, I've read it now. Most of it doesn't apply to me, but it's useful background info.

Daniel54 wrote: »

You can go back to 2006 if necessary
https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

Thanks, yes that covers gaps of a couple of years, but there are gaps from a few years before
- early 2000s that when I was contacting HMRC and not getting any reply. I think I'll have to accept that's all gone now. As it stands, I'll have to make NI contributions for every 20-odd years from now till retirement age to get full pension, and given my spotty work history, that's a risky strategy for me.

It's a bit upsetting as the website shows I have roughly 10 years in total of contributing 35-40-odd weeks of NI per year, none of which counts a jot towards my pension.

Edit - to clarify, if HMRC had got back to me when I first asked, I would have been able to fill in nearly all these years.

did they stop doing that?

Yes, they did.

The "deficiency notices" were always a bit hit and miss and when the old NIRS system was replaced with NIRS2 in the 90s the resulting chaos saw the end of these. I have a feeling that there was a fight between Accenture (Andersen Consulting at the time) over whether they were ever contracted to do this.

Of course if we had ever got a regular statement of NI contributions this would not be an issue!