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Pension query (another one)

skyscraper101

skyscraper101

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Didn't want to jump on any of the other pension threads. This one is for my Mum.

She was born in 1958, turned pension age of 66 in July of this year. She hasn't had any letter or anything from the HMRC to be able to start claiming it. So I'm trying to help her through the whole HMRC app thing so she can start getting it.

Before I request the code/letter/whatever for her, I thought I should check if she has enough contributions through the years. On the app you can see this, dating back to the mid-seventies. It suggests there are 45 'full years' and about 5 'year is not full' years (since 2006) which are 'payable.' When I checked the total amount payable over these years it amounts to around £2.5k.

So, the question is - is there any benefit to paying this £2.5k? My understanding is you need 39 years of full contributions to claim the full State Pension. If she has 45 'full years' then that threshold it met? Right? Am I missing anything?

Also, will any unclaimed pension since July be payable? This is all new territory for me and her. Any advice welcome, ta.
 
For anyone who started contributing pre 2016 (so definitely your mum) there is no set number of years to contribute. It depends on a lot of things, including whether she was contracted out at any point and other stuff. You need to look at the amount it says she will receive. If it says “you cannot increase this amount any more” there is no point in buying extra years. If you can increase it, there will be a point.
 
PTK said:
I know that I got pension forecast.
There is a thing on the government website, where you can get a pension forecast.
www.gov.uk

Check your State Pension forecast

Find out how much State Pension you could get (your forecast), when you could get it and how you could increase it
www.gov.uk www.gov.uk
Click to expand...

Thanks. I just tried this. Looks like this area is restricted and her accountant has the gateway ID to see it as there is a message saying "We have found your personal tax account under a different Government Gateway user ID" - and then his email/details.

So I won't be able to get this until the new year. What a faff. I guess my question is hypothetical anyway. Is there any reason someone with 45 'full years' wouldn't be able to get the full state pension?
 
Your Mum is just slightly younger than me, so same rules will apply, If she's got 35 or more full years she should get the full state pension any extra years buy nowt (I had 49). the 5 extra years are possibly from when she was in a contracted out scheme and didn't pay the full stamp but it's not worth paying it up since it will buy her pennies.
They definitely should have sent her a letter but if you have her NI number they will send her another if you ask (they did with me since I lost the original) takes a few days.
They will either offer her a lump sum to cover back to her birthday or a very slightly larger payment that's roughly 1% extra for every 9 weeks she didn't claim.
 
skyscraper101 said:
Thanks. I just tried this. Looks like this area is restricted and her accountant has the gateway ID to see it as there is a message saying "We have found your personal tax account under a different Government Gateway user ID" - and then his email/details.

So I won't be able to get this until the new year. What a faff. I guess my question is hypothetical anyway. Is there any reason someone with 45 'full years' wouldn't be able to get the full state pension?
Click to expand...
It would be very unlikely that you wouldn’t get the full state pension with 45 years but I think it’s hypothetically possible.
 
nottsgirl said:
For anyone who started contributing pre 2016 (so definitely your mum) there is no set number of years to contribute. It depends on a lot of things, including whether she was contracted out at any point and other stuff. You need to look at the amount it says she will receive. If it says “you cannot increase this amount any more” there is no point in buying extra years. If you can increase it, there will be a point.
Click to expand...

What does 'contracted out' mean? IIRC she has always worked for a company on PAYE and any time not doing this would be I guess unemployed or just not working/parenting etc.
 
skyscraper101 said:
What does 'contracted out' mean? IIRC she has always worked for a company on PAYE and any time not doing this would be I guess unemployed or just not working/parenting etc.
Click to expand...
Contracted out as I understand it - some people ie who were in an NHS pension paid less NI while they were paying into another pension and this was being contracted out. I don’t think they were accruing state pension while they were paying into their other pension.

As for how many years you need, at some point when they switched over from the basic state pension to the new state pension they did a complicated series of calculations to work out how many years you needed. Hence not everyone needs the same number of years.
 
nottsgirl said:
Contracted out as I understand it - some people ie who were in an NHS pension paid less NI while they were paying into another pension and this was being contracted out. I don’t think they were accruing state pension while they were paying into their other pension.

As for how many years you need, at some point when they switched over from the basic state pension to the new state pension they did a complicated series of calculations to work out how many years you needed. Hence not everyone needs the same number of years.
Click to expand...

Ah OK, no I don't think she did anything like that. Never worked in the public sector.
 
skyscraper101 said:
What does 'contracted out' mean? IIRC she has always worked for a company on PAYE and any time not doing this would be I guess unemployed or just not working/parenting etc.
Click to expand...
If you're in a contracted out pension scheme then you're getting tax relief on the scheme you're in and paying a slightly smaller NI stamp as well. This makes your state pension a tad smaller though having a private pension (especially a final salary one) generally gets you more money in total. You can make up the NI shortage if you want but there's a sweet spot of 9 years. If you have more than this to go to retirement you'll overpay and much below it you'll underpay.
nottsgirl said:
Contracted out as I understand it - some people ie who were in an NHS pension paid less NI while they were paying into another pension and this was being contracted out. I don’t think they were accruing state pension while they were paying into their other pension.

As for how many years you need, at some point when they switched over from the basic state pension to the new state pension they did a complicated series of calculations to work out how many years you needed. Hence not everyone needs the same number of years.
Click to expand...
You are accruing state pension just not quite as much.
 
PTK said:
I know that I got pension forecast.
There is a thing on the government website, where you can get a pension forecast.
www.gov.uk

Check your State Pension forecast

Find out how much State Pension you could get (your forecast), when you could get it and how you could increase it
www.gov.uk www.gov.uk
Click to expand...

I was able to get the right login details in the end. But this link doesn’t actually tell you what the forecast is. It just links to the contributions page or gives you a link to get the code sent to you in the post.

I think I’m just going to get this code sent through and maybe after starting the process of getting the pension it will reveal what the actual score is.
 
skyscraper101 said:
I was able to get the right login details in the end. But this link doesn’t actually tell you what the forecast is. It just links to the contributions page or gives you a link to get the code sent to you in the post.

I think I’m just going to get this code sent through and maybe after starting the process of getting the pension it will reveal what the actual score is.
Click to expand...
I know that I received a letter on the post, but I cannot remember the process for getting it. The point is, your mother can get a forecase of what here pensio will be, and then she will know if she has to pay any more contributions.
 
PTK said:
I know that I got pension forecast.
There is a thing on the government website, where you can get a pension forecast.
www.gov.uk

Check your State Pension forecast

Find out how much State Pension you could get (your forecast), when you could get it and how you could increase it
www.gov.uk www.gov.uk
Click to expand...
It's depressing looking at the forecast - £11.5k a year is pretty shit for the full state pension, even though its many years until I can claim it. Thank god I've got an occupational pension as well.
 
If she has paid 45 years, I don't think there is any reason to pay more. But when you login to the government Gateway, it should tell you how much you are currently entitled to and also the maximum possible. I think it's currently about £832.

I needed to top up a bit, but as a self-employed person I was able to do class 4 contributions which were cheaper.

My friend has delayed taking her pension as she is winding up a business, has money to take out and will lose most of it in tax.

HMRC sent me a letter several months ago asking what I wanted to do. I turned 66 in December and got my first payment on 24th. (Which was nice, but not as much fun as the bus pass, which feels like a bit of a freebie.)
 
farmerbarleymow said:
£11.5k a year is pretty shit for the full state pension
Click to expand...
I only get £7k pa State Pension with over the 35 years maximum contributions. I did pay reduced contracted out contributions as I was contributing to an Employer's scheme pension.
I'm glad I do have the Employer's scheme pension as I couldn't live on just the State Retirement Pension, but it did take a big sum out of my wage when I was working.
 
skyscraper101 said:
Thanks. I just tried this. Looks like this area is restricted and her accountant has the gateway ID to see it as there is a message saying "We have found your personal tax account under a different Government Gateway user ID" - and then his email/details.

So I won't be able to get this until the new year. What a faff. I guess my question is hypothetical anyway. Is there any reason someone with 45 'full years' wouldn't be able to get the full state pension?
Click to expand...
I would query this access with the accountant, as she (you) aught to be able to access this herself as it is hers not the accountants (may explain why she has heard nothing though).
 
farmerbarleymow said:
It's depressing looking at the forecast - £11.5k a year is pretty shit for the full state pension, even though its many years until I can claim it. Thank god I've got an occupational pension as well.
Click to expand...

and that 11.5k a year makes you 'wealthy' according to the new labour apologists...
 
skyscraper101 said:
What does 'contracted out' mean? IIRC she has always worked for a company on PAYE and any time not doing this would be I guess unemployed or just not working/parenting etc.
Click to expand...

I am due my state pension in August, Think I was contracted out for around 8 years, which still means I have the 35 years needed for the full pension and had some years of SERPs.​

What contracting out was​

Under the State Pension rules before 2016, you or your workplace or private pension scheme could choose to ‘contract out’ of the Additional State Pension. The Additional State Pension was also known as State Second Pension or ‘SERPs’.
This guide is also available in Welsh (Cymraeg)
If you were contracted out of the Additional State Pension, some of your National Insurance contributions were either:
  • lower than people who were not contracted out
  • paid into another pension, for example a workplace or private pension
Check how contracting out affects your amount.
All contracting out stopped on 5 April 2016. After this, all National Insurance contributions are at the standard rate until you reach State Pension age.
 
skyscraper101 said:
What does 'contracted out' mean? IIRC she has always worked for a company on PAYE and any time not doing this would be I guess unemployed or just not working/parenting etc.
Click to expand...
a 'contracted out' Private or occupational pension scheme meant you paid less NI , you buiult no entitlement to S2P / SERPS but the pension scheme had to meet certain standards in termso f the scheme pension

this had no impact on the basic state pension
 
i think there also used to be a reduced rate NI contribution that married women could pay, not sure if or when that changed, but some women have been bitten by this as it generates a lower state pension

this might just be relevant here
 
Puddy_Tat said:
and that 11.5k a year makes you 'wealthy' according to the new labour apologists...
Click to expand...
the fact is the data shows that pensioners are the wealthiest demographic group over all =- 27 % of pensioners are millionaires

you also seem to be making the same mistake that many people make of equating the Baisc State pension in the UK with the total pensions of peopel elsewhere i nthe world ( so Basic + SERPS equivlanet + occupational pension) and ignoring that many other benefits remain payable to pensioners in the UK - notably housing benefit

theferret.scot

Claim 27 per cent of pensioners are millionaires Mostly True

Ferret Fact Service looks at a claim about the number of millionaires who are millionaires in the UK.
theferret.scot theferret.scot
 
InArduisFouette said:
the fact is the data shows that pensioners are the wealthiest demographic group over all =- 27 % of pensioners are millionaires

you also seem to be making the same mistake that many people make of equating the Baisc State pension in the UK with the total pensions of peopel elsewhere i nthe world ( so Basic + SERPS equivlanet + occupational pension) and ignoring that many other benefits remain payable to pensioners in the UK - notably housing benefit

theferret.scot

Claim 27 per cent of pensioners are millionaires Mostly True

Ferret Fact Service looks at a claim about the number of millionaires who are millionaires in the UK.
theferret.scot theferret.scot
Click to expand...

i'm not arguing that there are no genuinely wealthy pensioners, just that a pensioner with an income of 11.5k is considered 'wealthy' in terms of the winter fuel allowance cuts
 
tony.c said:
I only get £7k pa State Pension with over the 35 years maximum contributions. I did pay reduced contracted out contributions as I was contributing to an Employer's scheme pension.
I'm glad I do have the Employer's scheme pension as I couldn't live on just the State Retirement Pension, but it did take a big sum out of my wage when I was working.
Click to expand...
www.gov.uk

Contracted out of the Additional State Pension

Check if you were contracted out of the Additional State Pension and what it means for your State Pension
www.gov.uk www.gov.uk

unsure how you managed ot get your state pension to be 7k solely from contracted out schemes, did you have periods of self employment , econoimic inactivity or 'ex-pat' working ?
 
nottsgirl said:
This 35 years thing is a complete myth, unless you started paying NI after 2016, which I don’t imagine most posters here did.
Click to expand...
2016 is to do with when you reach Pension age , pleanty of people who retired after or will retire after 2016 who have contracted out pension schemes from the pre- auto enrolment / new state pension era
 
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