National Insurance on Pension and commutation

mph1977

War Hero
I am in discusions at the moment with the DWP over my NI contributions.

I am ex army and ex HMP with over 30 years NI contributions.

I am receiving a Civil Service ill health pension (army time plus HMP service). (I am not receiving any benefits or other income).

I have been advised I do not need to pay any more NI contributions for a old age pension at 66 ish.

Please can any Pay Bods etc confirm if this info is correct as I do not wish to be stung at a later date.

while you may have paid sufficient NI for a full state pension , by avoiding paying them , you fairly soon (months to a year or two) you lose any entitlement ot contributory benefits and allowances from the DWP .
 
while you may have paid sufficient NI for a full state pension , by avoiding paying them , you fairly soon (months to a year or two) you lose any entitlement ot contributory benefits and allowances from the DWP .
I have written to DWP asking for them to explain situation.

It is confusing but what entitlements would I lose? I am not claiming unemployment benefits or any other benefits (nor do I wish to), as I am medically retired on a civil service pension made up of army time and civil service time.

DWP have stated I have enough years for a state pension.

In the event I start to work again I am happy to pay NI contributions. I pay tax on my pension.

I prepay for my normal medical prescriptions and I have a army injuries exception for those injuries I received in the army that I require medication for.

Confused.
 
I have written to DWP asking for them to explain situation.

It is confusing but what entitlements would I lose? I am not claiming unemployment benefits or any other benefits (nor do I wish to), as I am medically retired on a civil service pension made up of army time and civil service time.

DWP have stated I have enough years for a state pension.

In the event I start to work again I am happy to pay NI contributions. I pay tax on my pension.

I prepay for my normal medical prescriptions and I have a army injuries exception for those injuries I received in the army that I require medication for.

Confused.
I am now also confused. I am paid up, 32 years, but don't pay NI with my current employer. I am not aware that they can remove my entitlement to a pension when I retire and move back to the UK. I have never heard of that, ever.
 
I thought I would mention this because I've seen the "30 years contribution equals a full pension" statement mentioned several times in this thread. I'm over 61 and so final retirement age is just under five years away for me.

I also quite some time ago ( a few years ago) had a letter saying that I had paid in 30 years of contributions and would be entitled to a full pension when I retired.

However, I checked the government website the other day out of curiosity. It's quite useful because you can check what your pension forecast will be at retirement age and also what your contribution record is.

It also say's that under the new rules, to qualify for the full old age pension, you need 35 years contributions. Not 30 years!!

Perhaps I'm mistaken but that's my interpretation of what it says.

So those who have said on here that they have their 30 years contributions and will get a full retirement pension should check again! They may need to pay some additional years under the new rules!
 
I thought I would mention this because I've seen the "30 years contribution equals a full pension" statement mentioned several times in this thread. I'm over 61 and so final retirement age is just under five years away for me.

I also quite some time ago ( a few years ago) had a letter saying that I had paid in 30 years of contributions and would be entitled to a full pension when I retired.

However, I checked the government website the other day out of curiosity. It's quite useful because you can check what your pension forecast will be at retirement age and also what your contribution record is.

It also say's that under the new rules, to qualify for the full old age pension, you need 35 years contributions. Not 30 years!!

Perhaps I'm mistaken but that's my interpretation of what it says.

So those who have said on here that they have their 30 years contributions and will get a full retirement pension should check again! They may need to pay some additional years under the new rules!
Just checked the government website and it says:

"To get the full basic State Pension you need a total of 30 qualifying years of National Insurance contributions or credits."
 
Just checked the government website and it says:

"To get the full basic State Pension you need a total of 30 qualifying years of National Insurance contributions or credits."
That's on the old system.. Prior to April 2016 you needed 30 years and got £119.30. After then, to get the new full state pension of £155 you need 35 years of contributions.

You’ll need 35 qualifying years to get the full new State Pension.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

(from site gov.uk/new-state-pension)
 
I just checked out their website. It's seems like I shall get £13.35 less than the full amount per week. More surprising was the revelation, based on my DOB, that I have to be 67 to receive that amount.

I feel another spreadsheet coming on, but at least now I have stable, accurate and predictable numbers to work with.
 

GrandadsMOB

War Hero
The golden rule is start planning your retirement well in advance.

Then, if you find that you are several years short of a full pension entitlement you have a choice to make:

- you can buy full years of contributions - so if you were, say, five years short you can buy these in bulk. Max is 6 years I think, but there are exceptions.

- if you haven't reached retirement age then you can pay voluntary contributions, monthly, and make up years that way - this works especially if you're not living/working in the UK any more. So if you're currently aged, say, 60 and your retirement age is 67 like greenbaggy then you could pay voluntary contributions each month for the next 7 years and that gets added to your total contribution pot - as I say even if you're not living in the UK.

BUT. This is only worth it if your total outlay is going to be less than the extra pension you will get. And this, of course, depends on how long you think you will be around before you shuffle off this mortal coil.

So, for example, greenbaggy tells us he's going to get £13.35 a week less because he won't have made the 35 full years of contributions (under the new scheme as outlined by exbleep).

That's £694.20 a year.

So he then works out on his spreadsheet how much he'll have to pay for voluntary contributions between his age now (say, f'rinstance, 60 'cos he's only a young shaver) and his retirement age (67) = 7 years of voluntary contributions currently at £14.10 a week = £733 a year x 7 = £5131 in total. That's fine if you're currently employed (say in another country) and can afford the £14.10 a week!

If those extra 7 years takes you to the magic 35 year figure for a full pension then for an outlay of £5131, generating an extra income of £694 a year, he needs to live for another 7.4 years past 67 = 74 and a bit. On his 75th birthday he's quids in and about to buy a retirement home in the Bahamas!!!!

But if he pops his clogs on his 74th birthday or sooner HMG comes out the winner, again!

If those extra 7 years DON'T take him to 35 years of contributions then he has to find out how many years short of that figure he is. He can then buy in bulk up to 6 more years worth, but these can be expensive. That then is added to the length of time he has to survive past 67 and, based on past experience of any kind of old squaddy, that's probably unlikely!!!!

More info here Voluntary National Insurance - GOV.UK and, of course, your mileage may vary.

Clear as mud? I thought so! But in my case because I started early enough it became worth it. And because I was living and working in another EU country I not only qualified for a full UK old age pension at age 65, in a few months, if I'm spared, I'll start receiving a full old age pension from that EU country as well. Add an occupational pension and my miserable Army disability pension and that shack on the beach in the Bahamas become a bit more tangible (or even one here in cheap-as-chips North Cyprus where we currently reside with all the rest of the tax-free (Russian) money-launderers!)
 
That's on the old system.. Prior to April 2016 you needed 30 years and got £119.30. After then, to get the new full state pension of £155 you need 35 years of contributions.

You’ll need 35 qualifying years to get the full new State Pension.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

(from site gov.uk/new-state-pension)

If you have a Occupational pension you will not get £155 not matter how many years contribution you have.

I have over 43 year contributions - how ever because I will have my 22 year forces pension and 18 years local government pension I will only get £119 a week

The £155 weekly pension is a con

Archie
 
Clear as mud? I thought so! But in my case because I started early enough it became worth it. And because I was living and working in another EU country I not only qualified for a full UK old age pension at age 65, in a few months, if I'm spared, I'll start receiving a full old age pension from that EU country as well. Add an occupational pension and my miserable Army disability pension and that shack on the beach in the Bahamas become a bit more tangible (or even one here in cheap-as-chips North Cyprus where we currently reside with all the rest of the tax-free (Russian) money-launderers!)
I didn`t think Northern Cyprus was in the EU

Archie
 
60 is still some way off for me, but your maths and reasoning are sound. This is exactly the approach I take to all major decisions like taking on a buy-to-let property or even when I retired from the army 8 years early.

I need to top up 3 years and have 12 years in which to achieve it. The real question for me though is whether it is worth the effort. I have a healthy LE pension and a reasonable private pot with my current employer, which because of a loophole in cross jurisdiction I can take as cash, as a pension or have in a SIPP.

My old fella was in his 90's when he passed away and I intend to beat him, so buying three years for 20+ years return seems like a great deal.

This is a quality thread.
 
If you have a Occupational pension you will not get £155 not matter how many years contribution you have.

I have over 43 year contributions - how ever because I will have my 22 year forces pension and 18 years local government pension I will only get £119 a week

The £155 weekly pension is a con

Archie
You will get it eventually. They have binned the "contracted out" part of NI so everyone will get the full 155 but it will take 35 years (ish).
 

Donny

ADC
If you have a Occupational pension you will not get £155 not matter how many years contribution you have.

I have over 43 year contributions - how ever because I will have my 22 year forces pension and 18 years local government pension I will only get £119 a week

The £155 weekly pension is a con

Archie
Not so. If you have an occupational pension which was contracted out of SERPS you'll only get the basic state pension (~£120 pw) because that's what you and your employer paid for. In that case your occupational pensions, since yours are both public sector, will massively outweigh the difference. If you contribute full whack NI contributions for a minimum of (I think) seven years in your working life (as well as the requirement for a total 35 years of some NI contribution) you'll get (what's now) the full state pension of £155.

It ain't rocket science.
 
I have had a response from from HMRC/NATIONAL INSURANCE.

I have 36 years up to April 2016.

But it states 'under the legislation in the Pensions Act 2014 you need at least 10 qualifying years (this does not have to be 10 qualifying years in a row) on your NI contributions record when you reach State Pension Age to get any State Pension'. www.gov.uk

On the back of the form it states;

If Class 3 NIC's are listed below, complete PART A if you were not self employed and you want to make a payment for a year to count towards State Pension. Please tick below for the year(s) that you want to pay.

TAX Year 2011/12; £176-40
TAX Year 2012/13; £689-00
TAX Year 2013/14; £704-60
TAX Year 2014/15; £722-80

All to be paid prior to 05/04/2023

Even more confused now!!!

Do I have to continue to pay NI up to State Retirement Age, currently 66 for me in 2026? even though I have 36 years banked. I am medically retired and do not work, living off a Civil Service Pension with addition Army years added and included.

I pay tax on some of my pension.

Why would I want or need to pay more in?
 

GrandadsMOB

War Hero
That seems to be very odd since you have paid more than enough contributions as far as I can see.

Did you ask for a state pension forecast? If you have a UK Government Gateway Personal Tax account you can do this from your account home page. You can also check your NI record to see whether you have the required number of FULL years contributions. For the new state pension this has to be 35 years (see replies above).

When I did this a few years ago (under the old regime - 30 years required, not 35) I received a letter which said in a box in the centre:

"Your State Pension estimate

We estimate that your State Pension will be £xxx.yy a week. This is based on your National Insurance (NI) contribution record up to the tax year xxxx/yy only, which shows you have zz qualifying years.

The amount of State Pension you get when you reach your State Pension age on mm/dd/yyyy may be higher than the amount shown above. The supporting information we sent with this statement explains how NI contributions or credits that are added to your NI contribution record may improve your State Pension."

Like you the accompanying documentation showed how much I could pay for a full year's contributions to be credited to my "account", as it were. This is what I was referring to earlier in my post [#48] about buying years. What astonished me was the list I was given showed that some years were cheaper than others - this because the rate of NI for those years was lower than others. When I said "Surely it's best for me to buy the cheapest years." I was told I'd be foolish not to!

Another strange thing in your post is that you've only been given the choice of four years to buy - I thought it was six (but that again could be the old regime).

Whatever - get back to them for a proper State Pension Estimate.

G'luck!
 
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GrandadsMOB

War Hero
Well, I don't know if this is going to help but here goes.

I received a letter from Equiniti in response to my phone call asking why my pension had been docked by so much when it was only supposed to be £0.8708 per completed year of reckonable service plus in my case £0.35 per week for contributions made during my service to the Graduated Pension Scheme.

The letter was, as my previous post, as clear as mud with references to GPS (which I took to be Global Positioning System but which, in a moment of englightenment, I realised was the aforementioned Graduated Pension Scheme).

Then I spent a frustrating hour plus being shuffled from phone number ("Press 1 for...; Press 2 for ...) to try to reach someone who could explain the figures to me. To no avail. I kept ending up with Equiniti, even though I was trying to go through Veterans UK. Equiniti even put me through to Veterans UK, only to be confronted by some poor young chap who, though sympathetic, couldn't help me at all and kept telling me to contact .... you guessed it ... Equiniti.

And all this at overseas phone call rates - not even EU ones!

But after sitting and thinking it through and after my moment of enlightenment re: GPS, and a further Google search, things began to fall into place.

I have been docked £0.8708 per year of service (calculated in some manner which I can't really understand since I served almost 9 years but would have to discount boys' service) and the above mentioned £0.35 per week for GPS (!!) which they said gave me a total abatement of £20.81 per annum.

But here's the rub.

That figure, they say, has been increased to £189.05 per annum in line with Consumer Price indexing.

Google found me this old post on a Forum from another disgruntled Forces Pensioner:

"However now comes the big RUB that £35.44 is indexed at a set rate of 5.2582% for every year since I left in 1976,. So in my case that is 35 years compound and comes to around £214 pa for Tax year 2011/12. Additionally that will be further indexed for each future year I.e. the figure is revised annually."

I think the gentleman's last comment above was because he's still not in receipt of his State Retirement Pension. I BELIEVE that the abatement is fixed (in my case at £189.05 pa) once you do start receiving the State Pension.

But there again, I could be wrong!

So the barstewards will still screw you even when you are Old and Bold!

Apologies for my wordy posts but it has certainly helped make things a little clearer for me so, one and all, I theng you for your patience and forebearance.
 
If you have a Occupational pension you will not get £155 not matter how many years contribution you have.

I have over 43 year contributions - how ever because I will have my 22 year forces pension and 18 years local government pension I will only get £119 a week

The £155 weekly pension is a con

Archie
Bloody hell what a stitch up bang out of order are there any other ways the Govenment can butt fu@k us.
 

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