State Pension potential shortfall warning
Discussion
Lead Farmer said:
However, the only way to pay NI is from a wage, you can't pay it from a private pension (though you can claim to be self employed and pay a voluntary amount each year). Previously you just needed to have paid the minimum number of years NI contributions (35ys) but thats now changed. Even if you've paid NI for 35yrs, if you don't keep paying NI after you've retired and right upto applying for your state pension, you may receive a smaller state pension than the maximum you could be expecting to receive.
Can you please post links to where you saw this information because I'm not sure that is the case. I haven't seen any indication that your SP will fall if you don't continue to pay NI contributions once you have qualified for the maximum SP.Lead Farmer said:
The good news is that you can pay buy back the missing years of NI. Some folk I know are expecting a shortfall in theiry state pension of £20/week and to negate this they can buy back the missing years of NI at around £780 for each missing year. So, retire at age 55 and with the state pension age of 67 that means having to buy back 12yrs of NI.
Again, where did you see this? When I was researching my own position I found out that it's not possible to go back that many years - I think the limit was 2015/16 & even that wasn't worth paying as it wouldn't contribute to my qualifying years. Anything from 2016/17 onwards did so I made two years payments.the tribester said:
LHRFlightman said:
I've already paid 38 years of full contributions, so why can't I stop now if I'm not getting anything on top of my £168?
I asked that too. It's not a contribution just for a pension, it's another tax on your income.
LHRFlightman said:
the tribester said:
LHRFlightman said:
I've already paid 38 years of full contributions, so why can't I stop now if I'm not getting anything on top of my £168?
I asked that too. It's not a contribution just for a pension, it's another tax on your income.
i4got said:
croyde said:
If I can find the money. I did a couple or three full time jobs back in the early 90s.
All three companies are not around today.
Plus one job was just over a year and the other two were maybe 6 months.
Looks like money lost.
There's a pension tracing service may be worth a go.All three companies are not around today.
Plus one job was just over a year and the other two were maybe 6 months.
Looks like money lost.
Edited by croyde on Thursday 2nd January 13:00
https://www.gov.uk/find-pension-contact-details
So its well worth finding if you have a private pension you know nothing about yet.
Mr Pointy said:
But if you have stopped worked at say 60 & your forecast says you have enough qualifying years for a full SP then as far as I am aware that amount doesn't fall just because you don't contribute for 7 years, which is what the OP seemed to claim.
The OP is not correct as far as i can see, once you have paid up the years required for full benefit, that's all you need for a full state pension.Its worth knowing, if you went to college post school leaving age, you had NI payments made for you as though you were employed, same if you register unemployed. If you dont work but don't register as unemployed, you don't get NI paid. So if you decide to not register for unemployment when made redundant, because you intend to take a bit of time out or just don't want the stigma, it will cost you.
i4got said:
Thanks, I did look at that earlier. It has come up with 2 pension companies that ring a bell. I'll give them a ring.
jsf said:
If you contracted out of SERPS into a private scheme (many people did, even those not taking out a paid into from salary scheme), unless you made a change to stop it, your contracted out payments continued to be paid into that scheme no matter where you worked, until the government ended the SERPS system payments. So you could have a tidy sum sat in a pension you know nothing about.
So its well worth finding if you have a private pension you know nothing about yet.
Indeed, see my post at 11:28 today. £120K (and growing) for doing nothing other than signing a form I didn't understand back in 1987. And it's in addition to my "proper" private pension. So its well worth finding if you have a private pension you know nothing about yet.
does anyone know what happened to the SERPS before you contracted out - I would have though everyone would have a bit where it said the extra pension you were paying before you contracted out (and when you contracted back in) has gone.
Or did that Pay For Gordon Brown's leaving party ?
Or did that Pay For Gordon Brown's leaving party ?
For those who are wanting me to post links to prove what I’m saying, sorry but I’m not trawling through all the research I’ve done in this just to try and prove myself. I’m not trying to tell anyone to believe me, I’m just warning others of a potential shortfall depending on their circumstances.
Just because the gov.uk says you’ve paid the maximum NI and don’t need to do anything else, that may not be true depending on your circumstances. You may have to continue paying NI.
I’ve personally spoken to people who have been affected by this and who are now having to buy extra years NI.
Being opted out of state pension for any period may definitely make the above true.
My point is, don’t automatically trust what the website says. If you are/have retired early then do your research and don’t get caught out. Finding out too late will mean there’s nothing you can do to correct it.
Just because the gov.uk says you’ve paid the maximum NI and don’t need to do anything else, that may not be true depending on your circumstances. You may have to continue paying NI.
I’ve personally spoken to people who have been affected by this and who are now having to buy extra years NI.
Being opted out of state pension for any period may definitely make the above true.
My point is, don’t automatically trust what the website says. If you are/have retired early then do your research and don’t get caught out. Finding out too late will mean there’s nothing you can do to correct it.
Jasey_ said:
does anyone know what happened to the SERPS before you contracted out - I would have though everyone would have a bit where it said the extra pension you were paying before you contracted out (and when you contracted back in) has gone.
Or did that Pay For Gordon Brown's leaving party ?
The bit you didn’t pay will have gone into your alternative pension, such as an occupational pension and will probably give a better return than if you had paid SERPS. But buying extra NI can give you a bigger state pension as well. Or did that Pay For Gordon Brown's leaving party ?
jsf said:
The OP is not correct as far as i can see, once you have paid up the years required for full benefit, that's all you need for a full state pension.
Not necessarily true say if youve opted out for any period, and some won’t even know if they have. But I’m not insisting you believe me, I’m warning folk to check. They have a choice to follow my advice and check for themselves, or assume they are safe and find out the hard way when they are age 67, which could be too late.
LeadFarmer said:
The bit you didn’t pay will have gone into your alternative pension, such as an occupational pension and will probably give a better return than if you had paid SERPS. But buying extra NI can give you a bigger state pension as well.
No I mean before I "contracted out".If I contracted out of SERPS I must have been "in it" in the first place.
I've Seen the COPE amount which is the additional amount I could have had had I not contracted out - But what happened to the SERPS payments I presume I was making before I contracted out.
And I'm pretty sure everyone then contracted back in a some point - what's happened to that ?
I'm just curious
LeadFarmer said:
Not necessarily true say if youve opted out for any period, and some won’t even know if they have.
But I’m not insisting you believe me, I’m warning folk to check. They have a choice to follow my advice and check for themselves, or assume they are safe and find out the hard way when they are age 67, which could be too late.
The 2016 changes are all around the extra state pension provided by SERPS/SSP and not the basic state pension.But I’m not insisting you believe me, I’m warning folk to check. They have a choice to follow my advice and check for themselves, or assume they are safe and find out the hard way when they are age 67, which could be too late.
LeadFarmer said:
For those who are wanting me to post links to prove what I’m saying, sorry but I’m not trawling through all the research I’ve done in this just to try and prove myself. I’m not trying to tell anyone to believe me, I’m just warning others of a potential shortfall depending on their circumstances.
So basically you have nothing?All the time you have spent replying on here you could have simply supplied a link.
Surely can't be that hard?
Even if we believe you how do we do something about it? Again a link would help.
LeadFarmer said:
Jasey_ said:
does anyone know what happened to the SERPS before you contracted out - I would have though everyone would have a bit where it said the extra pension you were paying before you contracted out (and when you contracted back in) has gone.
Or did that Pay For Gordon Brown's leaving party ?
SERPS started 6April 1978, so any employment before that date would not have earned SERPS benefits anyway.Or did that Pay For Gordon Brown's leaving party ?
Any employment period after 6 April 1978 you had to be either fully participating in SERPS or contracted out of SERPS. If you were fully participating you will get a SERPS benefit for the period of participation, paid in addition to your State Basic Pension. If you were contracted out for any period you would have earned at least a SERPS equivalent benefit in an occupational or private pension arrangement. Note that at the end of a period of contracted out (usually when employment ended) it was possible in some circumstances depending on the occupational/private pension rules etc. for a "State Related Premium" to be paid from the occupational/private pension in order to be reinstated into SERPS for the period you were contracted out.
Changing jobs frequently could mean lots of bits of SERPs pensions and also lots of bits of contracted out pensions have been accumulated.
R.
Drumroll said:
So basically you have nothing?
All the time you have spent replying on here you could have simply supplied a link.
Surely can't be that hard?
Even if we believe you how do we do something about it? Again a link would help.
Life doesn’t always revolve around links. Sometimes information exists outside of the internet, in the ‘real’ world. All the time you have spent replying on here you could have simply supplied a link.
Surely can't be that hard?
Even if we believe you how do we do something about it? Again a link would help.
In this case, I’ve spoken to people face to face in the real world outside of the web. Some whom have retired before 67 and started receiving their occupational pension and then discovered they won’t qualify for the full state pension, being about £20/week short. They are lucky to have found out in time so they can buy back the missing years of NI at a cost of about £780 for each missing year.
If you are remaining in work and paying your NI right up to when you apply to receive your state pension then you may be ok, but not if you retire early and don’t continue to pay NI.
How do you do something about it you ask? I’ve already told you. You need to phone the help line on the gov.uk website and find out for yourself as ‘they’ won’t contact you to tell you. It’s onky from some people realising at the last minute that I’ve become aware of this.
‘Even if we believe you how do we do something about it’ you ask........I’ve already answered that one. PHONE THEM AND CHECK.
Edited by LeadFarmer on Thursday 2nd January 18:46
Edited by LeadFarmer on Thursday 2nd January 18:46
anonymous said:
[redacted]
It matters not that you don’t believe me. Feel free to doubt it, for it matters not to me. I’m not even trying to make anyone believe me, I’m just raising the matter for people less shortsighted than yourself so they can check for themselves incase they are affected by this. If you discover at age 67 that it does affect you, please be sure to let me know and I’ll provide you a ‘link’ to this thread
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