UK State Pension - Qualifying Years

[mystomachehurts]

I left England about 3 years ago, and am now resident in Ireland.

Today I received a letter from the Pension Service in the UK indicating that in 2007 they changed the rules for qualifying for a full state pension. It seems that you must now contribute for a minimum of 30 years to receive a full basic State Pension.

Now since I am not contributing NI any more, and so far I've only contributed for 17 years, I will only receive 17/30 (a little over 50%) of my potential entitlement.

They're asking for a voluntary contribution of £382.20 for the years 2005-2006, and I imagine they'll be asking for more voluntary contributions over the next 13 years untill I hit the golden 30 years of contributions.

So, what to do? Should I pay the voluntary contributions, and so gain a full state pension or is the moeny better put into my private pension plan?

Any thougts from those that know about this stuff?

Just as an aside, what is the likely payment of a full basic state pension when I retire (I'm 38 at the moment)

Many thanks for any pointers.

[dazren]

Think of it this way.

30 years at £382.20 gives a total of £11,466. £11.5k for a full state pension seems an absolute no brainer.

No idea what a pension will be paying in the future. Or what age we'll be able to start drawing it.

DAZ
(38, also making voluntary conts to complete the 30 qualifying years)

[mystomachehurts]

dazren said:

Think of it this way.

30 years at £382.20 gives a total of £11,466. £11.5k for a full state pension seems an absolute no brainer.

No idea what a pension will be paying in the future. Or what age we'll be able to start drawing it.

DAZ
(38, also making voluntary conts to complete the 30 qualifying years)

Even better, I only need to contribute for another 13 years to hit the 30 year cut off.

So, 13 x £382.20 = £4968.60 assuming the price doesn't do up year on year, which I assume it will.

As you say, peanuts really. Even better, reading the small print, I have until 2012 to make this first payment!

Still, if my full state pension is going to be £20/week, I think I'd rather put it into my private fund.

[dazren]

I think the full state pension is currently about £90 a week, so not far off £400 a month!

[dazren]

Relevent link:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Pe...

[Gordon Brown]

dazren said:

I think the full state pension is currently about £90 a week, so not far off £400 a month!

Won't you get it pro-rata? IE. you still get 17/30th of the £90 a week = £51. So the extra £39 a week is worth £2028 a year and in return you pay the 17 years at £382 or whatever it was, so £6494, which is just over 3 years pension. Not sure what the compound interest on £382 a year in savings would be but if you live more than about 5 years past retirement sounds like a good deal.

I am in the same boat having paid in 22 years but have not paid anything for the last 4 or 5 years.

I recall a debate about this recently on PH as to wther it was wise just to pay the 30 years then stop, as paying more than 30 didn't get you anything extra, so why pay?

My only concern is whether by the time I reach state etiring age it will be all means tested and as I have a private and a final salaray pension waiting anyway as to whether any payments in may be wasted.

[dcb]

mystomachehurts said:

So, what to do? Should I pay the voluntary contributions, and so gain a full state pension or is the moeny better put into my private pension plan?

So they are asking for a load of money now, for a promise
of something later.

I'd avoid at all costs giving them any money at all.

They will only waste on a bunch of daft schemes,
and there is no guarantee they will deliver the
pension when the time comes.

I'd stick it in a personal pension. At least if you
don't like the returns, you can move your money around
[ still in the private sector].

You will also be reducing future generation's
tax bills.

[1066]

I work at The Pension Service dealing with State Pensions: The current basic, 100% state pension is £87.30 per week.

Also, if you are male, you need 39 years of contributions for 100%, not 30 as has been stated previously in this thread.

HTH.

[dazren]

1066 said:

I work at The Pension Service dealing with State Pensions: The current basic, 100% state pension is £87.30 per week.

Also, if you are male, you need 39 years of contributions for 100%, not 30 as has been stated previously in this thread.

HTH.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/PensionsAndRetirement/StatePension/DG_10014671

From the above link:

"However, if you reach State Pension age on or after 6 April 2010, you will need 30 qualifying years for a full Basic State Pension."