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    • kingsleypne
    • By kingsleypne 3rd Jul 18, 2:14 PM
    • 27Posts
    • 5Thanks
    Filling in missing NI years to boost state pension
    • #1
    • 3rd Jul 18, 2:14 PM
    Filling in missing NI years to boost state pension 3rd Jul 18 at 2:14 PM
    My wife has gaps in her NI record and we've been wondering whether to pay Class 3 contributions either to fill in those gaps or to pay for future years (she no longer works).

    She received a state pension forecast recently which indicated that based on her current NI record her forecast was 126.93 per week and that she needed to contribute another 8 years to get a full pension. The state pension forecast also indicated a COPE amount of 8.76. Her starting amount is based on the new pension rules.

    I checked her state pension forecast online which indicated she had 29 years of contributions. This confused me as this seemed to imply she only needed 6 more years of NI contributions so I rang the Future Pensions Centre.

    They told me she could pay NI contributions for up to 6 years prior to 2016 but would then need another 2 years post 2016 to wipe out the COPE amount.

    Previously I'd been led to believe filling in the gaps prior to 2016 would not increase her state pension - she would have to buy post 2016 years.

    Can anyone confirm that what I'm currently being told by the Pensions Centre is correct? I don't want to pay for years prior to 2016 if they're not going to count.
Page 2
    • Iamadored
    • By Iamadored 5th Jul 18, 2:12 AM
    • 30 Posts
    • 12 Thanks
    OP: Making voluntary NICs to maximise your wife's SP is a no brainer. It is a very good deal.

    The cost of plugging past gaps is due to go up in April 2019, so it is best that you do so this financial year.

    The FPC were set up specifically to help people avoid wasting their money paying Voluntary NICs that will not increase their SP.

    It is clearly a very complicated business, which is why you need expert advice. The FPC are the professionals.
    • GunJack
    • By GunJack 5th Jul 18, 8:47 AM
    • 10,538 Posts
    • 7,887 Thanks
    OMG you have lost me. What specific information does the OP need to provide to enable you to determine whether the FPC has given him the correct advice?
    Originally posted by Iamadored
    wife's age
    employment/benefits status
    was the SP estimate done with or without FY 16/17 and 17/18 included?

    as jamesd said, this could be a very close old/new rules calculation, and so the more detail the better.
    ......Gettin' There, Wherever There is......
    • molerat
    • By molerat 5th Jul 18, 8:55 AM
    • 20,226 Posts
    • 14,515 Thanks
    If only FPC would provide an old rules and new rules calculation at April 2016. Oh, wait a minute, they used to but stopped it and dumbed it down as it confused people because they did not read what it was telling them and just looked at the numbers. I am sure there are even more people struggling now without that information.
    • kingsleypne
    • By kingsleypne 5th Jul 18, 10:20 AM
    • 27 Posts
    • 5 Thanks
    Many thanks to everyone for their comments.

    I rang the FPC today and they will send a letter to my wife listing the options she has to boosting her state pension. It won't cover the cost of those options but we can get that from her NI record or advise her in any way which is perfectly reasonable but at least it will give us some reassurance.

    Just to add a bit more detail. She is 55, has no plans to work again and is not receiving benefits. All her NI record was built up prior to 2016. She has 8 gap years prior to 2016, 2 of which are partial years. The cost of paying for the 6 cheapest of those years is approx 3200, so it seems a no-brainer to pay for both them and the two post-2016 years. I estimated that based on current state pension values it's worth she survives to receive her state pension for 3 years.

    The calculation of her starting amount is currently quite close. Her "old" starting amount is 29/30 x 119.3 + 2.12 (additional state pension) = 117.44 and her "new" amount is 29/35 x 155.65 - 8.76 (COPE) = 120.21. To get "today's" value you need to multiply both by 1.025 and 1.0301 so 124 and 126.92 respectively.

    Again, thanks for everyone's comments.
    • molerat
    • By molerat 5th Jul 18, 11:03 AM
    • 20,226 Posts
    • 14,515 Thanks
    Has she been looking after grandchildren at all, another nice little NI earner, MrsM has saved 3.5K of class 3 !

    You obviously are on top of this. Where did you get all those figures from, was it from you recent contact with FPS or did you have it from the old style forecasts ?
    Last edited by molerat; 05-07-2018 at 11:07 AM.
    • kingsleypne
    • By kingsleypne 5th Jul 18, 12:13 PM
    • 27 Posts
    • 5 Thanks
    No - sadly no grandchildren yet.

    The figures are from a mixture of old pension statements, a recent pension forecast and the online pension/NI stuff. The written pension forecast is not helpful - all it stated was the estimate (126.93), the forecast if she contributed another 8 years, and the COPE amount. No mention as to how these numbers were arrived at or how she could boost her pension. I eventually worked out (confirmed by you I think) how they got to 126.93. What I was concerned about was how savvy the FPC are but having spoken to them twice and with the information and comments from this thread, I feel more comfortable now. When I receive confirmation in their letter, I'll go ahead and pay to fill in the gaps.

    What concerns me is that I have a basic understanding about the state pension and how it's changed and so I had enough information and the time to ring up and query it - other people without that understanding may find it more difficult.
  • jamesd
    Thanks for the extra detail, I'm also now confident that the FPC were right and it's fine to go ahead and buy up to six pre-2016 years. The reasons not to buy that many are just uncertainties:

    1. will grandchildren show up and will she care for them and get credits for doing it?
    2. what will happen to the price in the future?
    3. if the money or some portion of it was invested, would it row more than the future price increases?

    People who ask here tend to be long term planners who favour getting it taken care of early.
  • jamesd
    Why would it not be? Presumably the contracted out period was only a few years which is why the new basis forecast is the higher.
    Originally posted by Tom99
    SeekTruth explains a bit here about how it depends on when the contracting out happened, with the rebate derived amount deduction being the same as the contracted out deduction given on the statement if the contracting out was all before April 1997. Which appears to be so in this case.
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