uk ni contributions

[sometimewoodworker]

1 hour ago, Andrew Dwyer said:

Yes, I have got forecasts, I posted the phone numbers as some posters were unsure about how to use the site/app.

My forecasts clearly shows that I paid 40 years yet still need 6 more years contribution to achieve FSP.





When I questioned them they said it was because I was contracted out , previous to this I thought it was because I was non-resident for many years.
Who knows ?
But the bottom line is I can pay the shortfall and if I live until I’m 70 then it will start to pay off.

As you were contracted out you should have been paying into a company or private pension, that pension should easily more than make up the difference. That was the reason to decide to contract out, I decided not to when offered the option.

 

If you were not paying into another pension or that pension has disappeared then your choice may have been suboptimal 

Edited February 20, 2019 by sometimewoodworker

[Andrew Dwyer]

45 minutes ago, sometimewoodworker said:

As you were contracted out you should have been paying into a company or private pension, that pension should easily more than make up the difference. That was the reason to decide to contract out, I decided not to when offered the option.

 

If you were not paying into another pension or that pension has disappeared then your choice may have been suboptimal 

Yes, I paid into 2 company pensions, one of which is frozen until I’m 65 and the other I am drawing.

I am also paying AVC’s to cover a period when I was working without a pension.

Edited February 20, 2019 by Andrew Dwyer

[Ajarnbrian]

Try to Google `Topping up your state pension`a PDF from Royal London, a company run by former pensions minister Steve Webb. This doc is very useful. I then bought some NI vol contribution years at around 700 pounds a year, which increases your state pension by about 240 pounds a year. An investment that will pay for itself in just 3 years! For anyone who already has 10 or more years but less than the 35 years of complete NI contributions, it could be very worthwhile.

[Kwasaki]

2 hours ago, Andrew Dwyer said:

Who knows ?
But the bottom line is I can pay the shortfall and if I live until I’m 70 then it will start to pay off.

All I can say is things are very different now, I thought the only you could get extra was to delay your pension and take it at a later time.

Edited February 20, 2019 by Kwasaki

[Mike Teavee]

Have to say I'm confused now as the NI site says I have 35 full years contributions, but the Pension Forecast site says I need to contribute 6 more years to get a full pension... 

[Andrew Dwyer]

Have to say I'm confused now as the NI site says I have 35 full years contributions, but the Pension Forecast site says I need to contribute 6 more years to get a full pension... 

Similar situation for me Mike . ( I have 40 years but still need another 6 years) my figures are very similar to yours.

 

I think it means you were contracted out at some point.

[Mike Teavee]

4 minutes ago, Andrew Dwyer said:

Similar situation for me Mike . ( I have 40 years but still need another 6 years) my figures are very similar to yours.

 

I think it means you were contracted out at some point.

Thanks Andrew, good point, I was contracted out for most of my career so it probably is that, I need to speak to them anyway to find out why my 2017/2018 is showing as not fully paid so will check with them then (Mid-March when I'm in the UK).

 

I've already paid 2017/2018 & 2018/2019 so if worse comes to worse will pay for another 4 years and hit the full amount (That's if they don't change the rules again :s).

 

[Andrew Dwyer]

39 minutes ago, Mike Teavee said:

Thanks Andrew, good point, I was contracted out for most of my career so it probably is that, I need to speak to them anyway to find out why my 2017/2018 is showing as not fully paid so will check with them then (Mid-March when I'm in the UK).

 

I've already paid 2017/2018 & 2018/2019 so if worse comes to worse will pay for another 4 years and hit the full amount (That's if they don't change the rules again :s).

 

Last Nov I already had my forecast and decided to pay the missing years.

Call them up with your NI number and bank details on hand and they will sort it there and then.

I paid a years amount ( £740 ) for 17/18 and then a partial amount for the 18/19  to get up to date and now monthly.

Edited February 20, 2019 by Andrew Dwyer

[evadgib]

This thread has been incredibly useful. Not only have I created a Govt Gateway a/c & accessed my NI record online but I have made two calls this afternoon to DWP and HMRC and ascertained that:

 

 a) DWP (+44 191 201 3600): My NI contributions are EIGHT YEARS short as a result of contracting out.

 

 b) HMRC (+44 191 203 7010): They suggested I download, complete and return their forms NI30 and CF83. 

 

My understanding is that some/all of my shortfall will be at the class 2 rate.

 

What a difference (in level of service from DWP/HMRC) a couple of years makes!!????

 

 

 

[Jaggg88]

If you have missing years before April 2016 it may not be worth making extra contributions. This article explains https://www.moneywise.co.uk/pensions/income-retirement/should-i-make-the-shortfall-my-national-insurance-contributions

 

[Mike Teavee]

10 minutes ago, Jaggg88 said:

If you have missing years before April 2016 it may not be worth making extra contributions. This article explains https://www.moneywise.co.uk/pensions/income-retirement/should-i-make-the-shortfall-my-national-insurance-contributions

 

Interesting as it reads that the money I spent catching up 2010-2016 may have been wasted as they'd given me a start amount in 2016 which didn't include these & paying them doesn't change anything (Which is a bit of a pisser to say the least).  If true that would explain why I'm still 6 years short despite having 35 years contributions as the 6 years AVCs paid between 2010/11 - 2015/16 don't count!!!

 

They shouldn't allow people to make additional contributions if it's not going improving their pensions any, I'll be asking about this when I speak to them as well...

[magicroundabout]

If you were contracted out it tells you at the bottom of the page on the govt portal. If you click on link it takes you to your COPE figure. My understanding albeit I'm not 100 per sure if this figure needs to be deducted fron your state pension as its contribution is made up from your work pension. 

[steve187]

17 hours ago, steve73 said:

Not sure I follow that logic..  My pension won't get paid at all for another 8 years and so returns nothing until then.  I have plenty more opportunity to continue growing my investment outside of the NI pension system.  

 

But is the additional payment increasing by as much as I'm making elsewhere?

I am planning on getting another pension forecast to see how things have changed over the past couple of years.

One question I do have, is: Is my pension forecast dependent on making further minimum NI payments until normal retirement age, or does it assume that I will make no further payments?

I currently have 30 years of credits, (out of 35 or 40years?)  The forecast payment was approximately 75% of a BSP, which seems to suggest that 40 years are required.

it gives you both, payments withe ni contributions you have, and what would be if you get more years,

30 years should give you a 30/35 pension excluding any contracted out years adjustment.

[sometimewoodworker]

13 hours ago, Mike Teavee said:

Interesting as it reads that the money I spent catching up 2010-2016 may have been wasted as they'd given me a start amount in 2016 which didn't include these & paying them doesn't change anything (Which is a bit of a pisser to say the least).  If true that would explain why I'm still 6 years short despite having 35 years contributions as the 6 years AVCs paid between 2010/11 - 2015/16 don't count!!!

 

They shouldn't allow people to make additional contributions if it's not going improving their pensions any, I'll be asking about this when I speak to them as well...

You have completely misunderstood the 6 years AVCs paid between 2010/11 - 2015/16 count

 

You were almost certainly contracted out for quite a long time. during that time you will have been paying into a different pension, so made lower pension contributions to the state pension and payed a lower NI rate.

Edited February 21, 2019 by sometimewoodworker

[sometimewoodworker]

16 hours ago, Kwasaki said:

All I can say is things are very different now, I thought the only you could get extra was to delay your pension and take it at a later time.

If you have a full 35 years of full payments, that is the only way to get more.

[steve73]

 

3 hours ago, steve187 said:

30 years should give you a 30/35 pension excluding any contracted out years adjustment.

 

I understood that "contracting out" was from SERPs (State Earnings Related Pension) or SSP (Second State Pension).

It was where higher earners would accumulate extra benefits either within the state scheme (contracted in) or you could add those benefits to an existing employee or private scheme (contracted out).  Either way the Basic State Pension was supposed to be unaffected.  It now appears that there have been no additional benefits from contracting IN to the gov't scheme. 

 

For a few years in my prime earning period, even when contracted OUT, I was contributing NI at 4-5x the minimum rate, yet I appear to have received no benefit from doing so.

 

The numerous changes, such as increasing the minimum age for drawing state pension, and changes to the number of years of contributions required, leads me to conclude it all seems a bit of a con..!  Combined with the reports of peoples additional contributions making no difference to their pension forecast, which is why I will not be making any top-ups, at least until the situation becomes much clearer. 

 

I do have some additional resources, both a small QROPS, and independent investments (ISA, etc) outside of any "pension" provisions, so I am not relying on the maximum (or indeed any) Basic State Pension, although of course, as they say every little helps.  

 

[Kwasaki]

12 minutes ago, sometimewoodworker said:

If you have a full 35 years of full payments, that is the only way to get more.

Well yes that is how I understand it.

What I don't understand is someone with 40 years NI contributions having to pay 6 years more, maybe something to do with the contracting out thingy.

I contracted out on advice and contracted back in and was better of because of it.

[Kwasaki]

6 minutes ago, steve73 said:

For a few years in my prime earning period, even when contracted OUT, I was contributing NI at 4-5x the minimum rate, yet I appear to have received no benefit from doing so.

Well I did.

[dabhand]

13 hours ago, Mike Teavee said:

 

They shouldn't allow people to make additional contributions if it's not going improving their pensions any, I'll be asking about this when I speak to them as well...

This part of your comment struck a chord with me.

I had been paying Class 3 by DD ever since I started working overseas back in 1979. When the qualifying years changed to 35 I checked my NI status and was advised I had paid 36 years at that time. So I cancelled the DD.

A few months later I received a letter from NI querying my DD cancellation and asking for the reason, warning that my pension could be affected by this non payment. I just ignored the letter as I knew my situation was clear.

I made no further NI payments and applied for my pension early last year and this came through at the full rate when I turned 65.

NI would have been quite happy for me to continue with the payments even though, at that point, there would have been no benefit to me. Just shows that all should ensure they are fully aware of their personal payment situation.

 

[Mike Teavee]

1 hour ago, sometimewoodworker said:

You have completely misunderstood the 6 years AVCs paid between 2010/11 - 2015/16 count

 

You were almost certainly contracted out for quite a long time. during that time you will have been paying into a different pension, so made lower pension contributions to the state pension and payed a lower NI rate.

f you read the 2 articles that have been linked to above and the "Topping up your state pension" PDF it certainly looks to me like

1. In April 2016 they set my Pension to a certain amount based on the years I'd contributed up to then
2. In Jan 2018 I back-paid for the 10/11, 11/12, 12/13, 13/14, 14/15 & 15/16 Tax Years  (6 Years)
3. This hasn't changed the amount they set for me in April 2016 so only contributions I make from 16/17 onwards will change it  - That to me = Doesn't count ???? 

But I'll find out for sure when I contact them next time I'm in the UK (Mid-March)

 

Edited February 21, 2019 by Mike Teavee

[Andrew Dwyer]

This part of your comment struck a chord with me.
I had been paying Class 3 by DD ever since I started working overseas back in 1979. When the qualifying years changed to 35 I checked my NI status and was advised I had paid 36 years at that time. So I cancelled the DD.
A few months later I received a letter from NI querying my DD cancellation and asking for the reason, warning that my pension could be affected by this non payment. I just ignored the letter as I knew my situation was clear.
I made no further NI payments and applied for my pension early last year and this came through at the full rate when I turned 65.
NI would have been quite happy for me to continue with the payments even though, at that point, there would have been no benefit to me. Just shows that all should ensure they are fully aware of their personal payment situation.
 

Yup, I talked to them last year about paying 6 years additional contributions to achieve full state pension.
She clearly stated that after 6 years I will achieve FSP and if I continue to pay there would be no benefit for me ( I would be throwing money away ), I would not lose any additional services ( NHS etc ), that I should monitor my forecasts to see the figures rise and cancel DD on achieving FSP.

I have since checked my forecast and have seen a rise since paying one years contributions.

[steve73]

18 minutes ago, Kwasaki said:

25 minutes ago, steve73 said:

For a few years in my prime earning period, even when contracted OUT, I was contributing NI at 4-5x the minimum rate, yet I appear to have received no benefit from doing so.

Well I did.

In what way did it benefit you for the state pension?  (Obviously any contracted out portion would have benefited you outwith the BSP). 

[Kwasaki]

3 minutes ago, steve73 said:

In what way did it benefit you for the state pension? 

(Obviously any contracted out portion would have benefited you outwith the BSP). 

It was one of 2 extra over amounts added to my UK gov pension.

The gov pension was the full amount that was given weekly at the time.

I have know idea what BSP is googled it comes up something about airlines. 

[steve73]

12 minutes ago, Kwasaki said:

It was one of 2 extra over amounts added to my UK gov pension.

The gov pension was the full amount that was given weekly at the time.

I have know idea what BSP is googled it comes up something about airlines. 

Sorry... Basic State Pension.  

I understand that you have a UK Gov Pension (i.e. as a former gov't employee) which is different to the BSP (that all old age pensioners receive).

[kannot]

On 2/20/2019 at 12:48 PM, evadgib said:

Appreciated. I have accessed my NI record online. I'm in no hurry to top up the 5 years incase they move the goalposts again but will look at it carefully.

Me  too as theyve  moved the goalposts at least twice now, 1st 45  years then 32,now  35? and yeah........will they really pay expats anything, I paid 32  years and then 1  year later they moved the  bloody  goal posts after Id  stopped  paying.

[Kwasaki]

15 minutes ago, steve73 said:

Sorry... Basic State Pension.  

I understand that you have a UK Gov Pension (i.e. as a former gov't employee) which is different to the BSP (that all old age pensioners receive).

Apologies I was not a former gov't employee.

I was in many full-time employment jobs, also self-employed for many years and then went back into full-time employment, eventually becoming one of the Directors of a company.

[steve73]

Just Checked Wikipedia for UK State Pensions... It has certainly clarified a few things for me.

 

https://en.wikipedia.org/wiki/State_Pension_(United_Kingdom) 

 

For me - born after 5th April 1951 - I will receive the "New State Pension" (or at least a proportion of it), rather than the "basic state pension".

35 qualifying years are required for NSP. (Not clear whether anything less than 52 weeks payment of NI means the whole year is discounted, or if this is just from 2016 onwards.) 

 

I'm still trying to digest it all....   

 

[Kwasaki]

2 hours ago, steve73 said:

Just Checked Wikipedia for UK State Pensions... It has certainly clarified a few things for me.

 

https://en.wikipedia.org/wiki/State_Pension_(United_Kingdom) 

 

For me - born after 5th April 1951 - I will receive the "New State Pension" 

 

I'm still trying to digest it all....   

 

Well their ya go l'm an old git born in the golden years apparently, you're a baby that the UK government are clobbering now because they don't want to pay for pensions anymore.  ????

[sometimewoodworker]

4 hours ago, Mike Teavee said:

f you read the 2 articles that have been linked to above and the "Topping up your state pension" PDF it certainly looks to me like

1. In April 2016 they set my Pension to a certain amount based on the years I'd contributed up to then
2. In Jan 2018 I back-paid for the 10/11, 11/12, 12/13, 13/14, 14/15 & 15/16 Tax Years  (6 Years)
3. This hasn't changed the amount they set for me in April 2016 so only contributions I make from 16/17 onwards will change it  - That to me = Doesn't count ???? 

But I'll find out for sure when I contact them next time I'm in the UK (Mid-March)

 

If you made payments after the amount set in April 2016 assuming that in April 2016 you did not have enough years for a full pension and that any other state pension (serps) did not add up to £159.66 and that those payments have not affected the the amount you are due to receive you have a strong case for those payments to be returned.

 

However there is nothing that I can see in the regulations for the basic full state pension that has the effect of disallowing any years to be counted as qualifying years.

 

If it is true that after those payments you are still not entitled to at least 164.35 then the ability to add qualifying years 2006~2016 is totally pointless 

Quote

Voluntary National Insurance contributions can help you to protect your National Insurance record if you are not building your National Insurance record through working or receiving credits. HMRC have extended the usual deadlines for making voluntary National Insurance contributions for the tax years from 2006-7 to 2015-16. You will have until 5 April 2023 to make the contributions.

 

 

So if your pension was set in April 2016 at anything less than £132,22 your payments made in Jan 2018 should have made it  about £27.5 higher 

 

[sometimewoodworker]

5 hours ago, steve73 said:

Just Checked Wikipedia for UK State Pensions... It has certainly clarified a few things for me.

 

https://en.wikipedia.org/wiki/State_Pension_(United_Kingdom) 

 

For me - born after 5th April 1951 - I will receive the "New State Pension" (or at least a proportion of it), rather than the "basic state pension".

35 qualifying years are required for NSP. (Not clear whether anything less than 52 weeks payment of NI means the whole year is discounted, or if this is just from 2016 onwards.) 

 

I'm still trying to digest it all....   

 

Anything less than a full year of payments = 0

 

You should get a pension forecast from DWP soon as you will have an opportunity to make up qualifying years.