I read somewhere that the minimum requirement for the state pension is going to be changed from 30 years contributions, to 35.
So far I have paid something like 27 years, but am no longer a UK tax payer. Every so often I get a statement saying I can pay the extra 3 years worth to get my pension. But there is always a long time frame in which to pay it, so I always put it off until I have more money (which I never seem to have).
So if I put it off for a few more years, and they bring in the 35 year rule during that time, will I suddenly have to pay an extra 5 years worth of NI, or will I still be on the 30 year rule?
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My broad understanding is that if you reach state pension age after April 2017, when the new flat rate pension comes in, you will need 35 years contributions to get it in full.
I will reach pension age in 2018 if spared. In today's money the flat rate state pension is £144/week, and as I have 39 years contributions I should get it. However I see comments to the effect that people who have been contracted out of the state second pension will get a reduced version of the standard payment. That could be me, though I have some SERPS years, but I have no idea what to expect so I will ask for another pension forecast after the legislation has gone through.
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I will get to 65 years old in 2027. So if I top it up now to make up the full 30 years, will they come back to me for another 5 years worth at a later date?
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My understanding is based on the reporting, e.g.
www.bbc.co.uk/news/business-11619379 and others.
As things stand, you won't get your pension until you are 66 either. I wouldn't count on that staying where it is.
www.gov.uk/calculate-state-pension/y/age
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How much would one have to pay for each year to bring the pension contributions up to date?
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www.pensionsadvisoryservice.org.uk/state-pensions/voluntary-national-insurance-contributions
A bit under £700 a year. But you can only go back a few years. It's good value when you work it out. The boss was a few years short so we paid them up and she gets a full pension plus a bit of Serps.
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Best pay up asap. There is a time limit for paying back missed years. Due to working overseas, I left it too late and now only qualify for 96% of the full rate.
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>>A bit under £700 a year.
About 10 years ago I bought three extra years and paid £1001 for the three years so it looks as if there has been quite an increase.
But they were very good value then, if you had the money, as I calculated IIRC that I would be in "profit" after drawing the pension for four years!
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They are very good value for what you get back.
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I paid 'graduated pensions' for a few years and kept the receipts. I'm wondering what that'll be worth when I reach state retirement age next year. I've got 39 years NI contributions as well IIRC.
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If we decide to live abroad I can see my pension being severely impacted :-( And plenty of tax and NI. Half of last year's bonus wasn't even seen for those reasons.
I don't yet have 20 years worth of contributions. But then I should work another 24 years before i get to retirement age. What I was thinking was if I could afford it, at £700/year it might be worth paying that in order to top up the pension so to speak... or maybe if we rented this house out and I paid tax on the income that would be enough?
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Yeah, it appears good value with the current deal. But still can't see anywhere that says you get the full amount once the 30 years are up, if this is done before they change the rules to 35 years required.
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Assuming they didn't move the goalposts (they probably will) then paying £700/year for quite a bit of time could mean I then got more back overall... I think. £700 is only £58.33 a month. It assumes I live to a good age of course!
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You can get a pensions' forecast either by asking them or applying online if you have a Government Gateway
More details here:-
www.gov.uk/state-pension-statement
Last edited by: R.P. on Wed 13 Feb 13 at 17:28
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The problem being the pending legislation.
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I'm 53 - I can prove my 30 years contributions - From what I've heard and read I will need to prove a further five years either in work or by buying in contributions - there was a very good episode of Moneybox on iPlayer which addressed the questions very thoroughly.
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Cheers RP...that covers a query I had. I've paid 30 years worth of NI and have now retired on my employer's pension and originally i'd have got the full State one as well, later on.
Now it seems I need to ensure another 5 years of NI...which to be honest you can't really complain about...and i'll be doing anyway....although now being self employed, I need to establish via the Accountant how I achieve that.
Do self employed books submitted via an Accountant automatically cover NI contributions?
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I have 40 years stamp........ < smug >
tho a fair chunk was "contracted out"
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>>Do self employed books submitted via an Accountant automatically cover NI contributions
If you earn more than roughly £8500 per year you should be paying NI on the earnings.
When I was self employed I paid NI by Direct Debit every month......15 years ago it was some £35/month. I paid my tax by filling in a tax return and paid my Income Tax 2 x per year.
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Class 4 Self employed NI is on profits, 9% on profits between 7,605 & 42,475, 2% on earnings over 42,475, for tax year 12-13.
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Of less of a worry to Westpig - but many SE people are running into benefits' difficulties now, especially with the sickness ones. Make sure your NI contributions are up to date. Easy to miss out on some and the DWP will have no qualms on screwing you.
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I retired early due to ill heath. Got my 30 years NI contributions, but not much more. Thankfully I got a good deal from the company pension scheme but I'm a fair way off getting an old age pension.
If one took the logic applied to driving licences, once you've qualified, that would be that, and rule changes would affect only those who hadn't qualified/passed the test. but that would be far too sensible!
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Pension changes - 30 to 35 years - Manatee
