Have you got your pension forecast?

[JohnD]

If not, please do.
https://www.gov.uk/check-state-pension


A useful tip from Martin Lewis today.

"Spending £5,700 on NATIONAL INSURANCE got me a potential £35,000 state pension boost.' To get the full state pension, you need a full national insurance (NI) record - but if you have gaps, you can usually buy extra years to fill 'em up. Normally, you can only backfill six years, but temporary rules mean you can now buy missing years from as far back as 2006, so anyone aged 45 to 70 should check now. Our Voluntary national insurance years guide has the full details (watch Martin's NI record explainer video first).

Helen emailed us in June with her success: "Many thanks. I paid for seven additional years at £5,700 but gained an additional £40/wk on my state pension which, if I live for 20 years, will give me an extra £35,000."

https://www.moneysavingexpert.com/latesttip/?anchor=mmd&utm_source=MSE_Newsletter&utm_medium=email&utm_term=19-Dec-23-9c59bb80c8640b8904a-6581f7d1d1effd84ef8672579dbca9a5&source=CRM-MSETIP-9c59bb80c8640b8904a&utm_campaign=nt-highlights&utm_content=22#mmd

 

[securespark]

I did check my contributions.

I missed some in a couple of years in the 80s. But it doesn't affect my pension.

 

[Mottie]

Just started getting mine. £240 a week. I haven’t paid any NI contributions in the last 15 years. All legal and above board. Ask JohnD and he'll tell you why……..

 

[Murdochcat]

Yup. Fully paid up and if I work to 67 I will have 50 years but will not get anymore than somebody on benefits for 35 years

Go figure

 

[Ihavenojob]

I check mine every now and then. I will not be getting the full whack as I was opted out for a few years. I can make contributions for the last few years, and those yet to come, but I don't think it will be worth it as they want about £800 a year, so £8k will get me £20 a week.
Just checked again, estimate based on payments up until April 2023 is £174 a week, max possible if I pay the £8k is £192 a week. Not sure if it has taken into account the rise in the pension rate yet.

 

[Brigadier]

Just checked.

According to the checker, I can't increase it.

 

[JohnD]

I was contracted out for a while, it took me time to discover that they deduct those years, even if you work 35 years or more contracted in.

...£8k will get me £20 a week....

Which is more or less index-linked.

A return of £1040 p.a. and growing for an investment of £8k? It's better than you would get if you bought an annuity with a pension fund. At age 65 with 3% escalation I think the best return is £416 at 5.2%*

Are you planning to die within 8 years?


*figures shown are from £100,000 paid

Annuity Rates Tables UK - Latest Pension Annuity Rates

Annuity Rates Tables UK for Best Standard basis. Find the Latest Pension Unisex Annuities on a gender neutral basis with our Free Annuity Quote to secure up to 25% Extra Annuity Income

www.sharingpensions.co.uk

 

[JohnD]

Yup. Fully paid up and if I work to 67 I will have 50 years but will not get anymore than somebody on benefits for 35 years

Go figure

I was doing holiday jobs from age 16, but although I paid NI they are not recorded on my forecast.

Doesn't matter as I have enough years.

 

[Brigadier]

What is taken into account, to say you've paid in full?

 

[JohnD]

I don't remember.

Have you received your forecast?

 

[ajohn]

I was contracted out of the state pension more or less as soon as I started to work for a living. I still get a basic state pension due to NI but it's knocked off my tax allowance effectively meaning I pay tax on both it and my private pension.

 

[Brigadier]

I don't remember.

Have you received your forecast?

£208. Says I can't up it.
I can't believe I've paid full whack (although I've always been PAYE, and have worked full-time for 30+ years), but have never been raking it in.

 

[JohnD]

£208. Says I can't up it.
I can't believe I've paid full whack (although I've always been PAYE, and have worked full-time for 30+ years), but have never been raking it in.

That sounds like the full new so-called "flat rate" state pension, payable after 35 years of contributions. It will increase next year. It is reduced if you were Contracted Out, but in that case you should have a private pension in addition. The old scheme was lower for most people.

In some cases there is an additional state pension resulting from Graduated Pension contributions or Serps, or a Second State pension. I'm not up to date with that and it also depends on age. Mottie may know how his was calculated. He mentioned that he will get £240.

The new State Pension

How to get and claim your State Pension, State Pension age - for men born on or after 6 April 1951 and women born on or after 6 April 1953.

www.gov.uk

http://www.moneysupermarket.com/pensions/state-pension-explained

 

[ajohn]

In some cases there is an additional state pension resulting from Graduated Pension contributions or Serps, or a Second State pension. I'm not up to date with that and it also depends on age. Mottie may know how his was calculated. He mentioned that he will get £240.

Around 25-30 years ago contracted out people with a private pension were advised to contract back in at a certain max age. I assume this was SERPS at the time but pass. Given my experience I have wondered if people who did this have found that the amount received is deducted from their tax allowance as a basic state pension is.

I am in need of a roofer. Talking to him he is very annoyed with Liz Truss. He would be retired now but reckons her actions have costed him £30k.

My brother retired recently. Looked at an annuity but given the returns has gone draw down instead. Ok apart from inflation related to interest payments on the pot. Headline inflation also can be rather misleading in this area. Eg food and some other things recently.

 

[JohnD]

I have wondered if people who did this have found that the amount received is deducted from their tax allowance as a basic state pension is.

You pay tax on your taxable income above your personal allowance.

So if your allowance is £12.5 k and your income is £22.5k, you pay tax on £10k.

It makes no difference to the amount of tax you pay how much comes from state pension, how much from private pension, and how much from employment or something.

Usually the state pension is less than your tax allowance so it is paid gross and any tax is deducted as PAYE from your private pensions or earnings. Some people mistakenly think the state pension is tax free.

But because our tory government has frozen tax allowances despite galloping inflation, we are moving into a time when even state pension can exceed tax allowance.