State pension forecast and NI qualifying years

[clockworks]

With two and a bit years left until I reach state pension age, I thought I should check how much I'm going to get.

I've been PAYE since the age of 17, up until 2 years ago when I went self-employed.

My forecast shows that, up until April 2020, I am entitled to £167.72.
If I make 3 more years contributions, I will get £179.60 (the current maximum)

Checking my contribution record, it says that I have 45 years of full NI contributions, 3 more years when I can make contributions, and 2 years where I did not make full contributions.

The 2 missing years are because I was working part time PAYE and part time self employed, and didn't earn enough on either to pay NI.


According to the government website, only 35 years of contributions are required to get the full state pension, so how come I have to contribute for 3 more years if I already have 45 years of contributions?

Normally this wouldn't be an issue, as I would have to pay class 2 and class 4 because of my self employment profits anyway.
For 2020/21, because of the repeated lockdowns, my self employment profits have dropped substantially, and I haven't qualified for any government grants so far.

It looks like my profits for the year will be a bit below the threshold for class 2, and if I really do need to make 3 more years of contributions, it would make sense to pay class 2 voluntarily for 2020/21.

If I want to make voluntary payments, is it just a case of ticking a box when I fill out my self-assessment online?

[Strangegravy]

We’re you public sector or military before going self employed? If so, have a read up on contracted in contracted out NI contributions.

If you weren’t public sector, I have no idea. The

[clockworks]

No, I worked in IT.

I think I was contracted out for some time in a company defined benefit scheme.
No idea how many years that was for though, as all the years are shown as "full"

[Strangegravy]

Suggest a call to DWP to clarify then. It seems wrong from your information.

[Mr Pointy]

It's the contracting out that does it, I'm the same. I have 41 years & still need three more.

Just be careful about which years you consider paying for as I was told any before 2015-16 won't count towards your pension entitlement althoug HMRC wil lhapply take your money. Also check on the "View Details" link next to years when you have a shortfall as it may tell you hown much you need to contribute to bring that year up to a full one & it may be less than the full year amount if you have had some qualifying contributions.

[clockworks]

Mr Pointy said:

It's the contracting out that does it, I'm the same. I have 41 years & still need three more.

Just be careful about which years you consider paying for as I was told any before 2015-16 won't count towards your pension entitlement althoug HMRC wil lhapply take your money. Also check on the "View Details" link next to years when you have a shortfall as it may tell you hown much you need to contribute to bring that year up to a full one & it may be less than the full year amount if you have had some qualifying contributions.

All the years (apart from 2) from 1975/76 up to 2019/20 show as "full", and it says that 2 years before 1975 are also full. I left school in January 1975, so not sure how I have full NI contributions for 1973/74 and 1974/75. Did staying at school beyond the minimum leaving age (15 at the time) earn qualifying years?

The two "missing" years are 2016/17 and 2017/18. They both say "We are checking this year to see if it counts towards your pension. We’ll update your record when this is finished, you do not need to do anything"

The years when I would have been contracted out are from 1978 when I joined my first company DB scheme, up until whenever the rules about contracting out changed. I'm guessing that the rules changed around 1981, as my NI contributions more than doubled in 1981/82 - same job?

I'll be back over the class 2 threshold for 2021/22, as business is picking up again, so that's 2 of the 3 years "shortfall".

I guess it makes sense to pay class 2 voluntarily for 2020/21. It's only £150-odd, and it'll increase my pension by more than that in a single year.


Is it just a case of ticking a box when I do my online return?

[markymarkthree]

Strangegravy said:

Suggest a call to DWP to clarify then. It seems wrong from your information.

2ND this. They were dead helpful when i rang them last year.
I retired 95% 6 years ago and am due my Gov pension in Jan 2023. They confirmed that i had made enough contributions over the phone, by email and a letter and that i am due the full whack. Plus i believe it will go up a little between now and 2023 due to the triple lock thingy.

[Mr Pointy]

markymarkthree said:

2ND this. They were dead helpful when i rang them last year. I retired 95% 6 years ago and am due my Gov pension in Jan 2023. They confirmed that i had made enough contributions over the phone, by email and a letter and that i am due the full whack. Plus i believe it will go up a little between now and 2023 due to the triple lock thingy.

Did you go online to get a SP forecast & if so how did it compare to the advice you got direct?

[markymarkthree]

Mr Pointy said:

markymarkthree said:

2ND this. They were dead helpful when i rang them last year. I retired 95% 6 years ago and am due my Gov pension in Jan 2023. They confirmed that i had made enough contributions over the phone, by email and a letter and that i am due the full whack. Plus i believe it will go up a little between now and 2023 due to the triple lock thingy.

Did you go online to get a SP forecast & if so how did it compare to the advice you got direct?

Yes i went online first and the forecast was exactly the same as when i spoke to a human and the confirmation letter sent to me.

[AndyAudi]

I’d something similar with my mother’s.
Was saying nothing received for last 3years self employed.

I’ve just sent off her tax/ni calcs & requested they look into it, she’s passed retirement age now but has never received any letters or pension yet & for some reason we can’t verify her/apply online. Fortunately she’s not dependent on a pension but it’s pretty frustrating trying to sort out.

[rfisher]

Anyone know when the NI record for 20/21 tax year is updated?

I think you can only go back 6 years to make additional contributions, so it's not always possible to fill in gaps if you are already paying current years in full.

Agree that calling them is worthwhile, as is asking for a written statement, as this is legally binding, unlike the 'forecast' on the website.

[Magooagain]

When I tried to phone NI I couldn't talk to anyone due to Covid! You can only talk to someone if you are within 6 months of pension age.
That may have changed now though.

[Mr Pointy]

Magooagain said:

When I tried to phone NI I couldn't talk to anyone due to Covid! You can only talk to someone if you are within 6 months of pension age.
That may have changed now though.

That's not been my experience over the last few months. It can be a bit of a wait to get through but I've always found them very helpful.