Help me work out whether I can top up my state pension
PLEASE can you explain why I can’t get a full state pension? I have written to the National Insurance Contributions Department four times and they haven’t answered my questions.
They say I have 42 years of contributions and no payment is needed except for 2013 to 2015. These dates represent when I left a job after 20 years due to problems with my shoulder.
I decided not to take sick benefits, but to retire, even though I do not hit state pension age until September 2021.
When I rang the pensions office concerning these two years of missing NI contributions, they advised me not to pay as it won’t alter what I receive.
I was in a company pension between 1997 and 2012 and wonder whether this is working against me. Mrs V. M., Bristol. IT is hardly helpful when helplines give conflicting advice.
your question will affect many people approaching retirement, so let’s consider the entire issue.
The full amount of the old basic state pension is £122.30 per week. however, the full new state pension, which started in April 2016, is £159.55 per week.
We are going through a lengthy transition period during which many who retire will not qualify for the full new state pension.
until April 2016, most of us built up qualifying years for the old basic state pension and a top-up called the state second pension or, previously, the state earnings related pension scheme (serps).
you needed 30 qualifying years to gain entitlement to the old full basic state pension. under the new regime, new entrants to the national insurance system will need 35 years.
for those already in the system, the transitional arrangements aren’t based just on the number of years.
now here’s the complication. Many of us who were in occupational pension schemes were taken out of the state second pension regime, which meant we paid less national insurance. As you suspect, this is what happened to you.
This is usually a good thing because your occupational pension will be at least as much as the state second pension you would have earned.
But when it comes to calculating your entitlement to the new state pension, a deduction is made for these years, which means you will not qualify for the full £159.55 per week.
At the same time, DWP looks at how much you would have received under the old regime. you are guaranteed to get the higher of the two amounts.
in your case, you were on course to receive £125.63 per week. This included a full basic pension and a bit of second pension.
Bear in mind you will have had four years of increases on this, which should add an extra £10. Visit gov.uk/check-state-pension to get an up-to-date forecast.
since April 2016, everyone has built up qualifying years to the new state pension on the same basis, whether or not they are in an occupational pension scheme. This works out at £4.56 per week earned for every year’s ni.
in your case, if you were to start working again and pay national insurance on your new job until you hit state pension age in 2021, you could bolster your pension by at least £18 per week — and probably more, depending on future increases. so you might reach around £153 a week.
you may also qualify for ni credits if you receive benefits such as unemployability supplement, e.g. payable with industrial injuries benefits or employment and support Allowance or statutory sick Pay, so you should investigate this.
Another avenue could be Class 3 ni, which would allow you to boost your pension by making voluntary supplementary payments of £14.25 a week. however, there is no point in paying ni for the years 2013 to 2015. This was before the new state pension started, so any contributions covering these years will not improve your position.
Anyone who wants more details should visit yourstatepension.campaign.gov.uk. AT THE beginning of March, I noticed that the mobile phone company Three was taking several payments from me each month.
Three had earlier written about account details being stolen, so I went to a store. An assistant said a SIM card had been issued, but never used.
I was confused because my previous plan had simply been rolled over and I had continued to use my existing SIM.
In addition there was a broadband router plan, which again the assistant said had not been accessed during the entire contract period.
I had been given the router, but was told to use it only if I required any data over my 2GB plan, which I never have. I then had a long conversation with Three’s call centre. We managed to stop the two accounts and I was promised a full refund.
Two weeks later, I had heard nothing, so called again, but this time came up against an extremely unhelpful customer relations person who said I would not receive a full refund and would be billed for the first year of both accounts. S. H., Glasgow. Three has given me some detail of what happened, but reading between the lines i suspect that whoever sold you these extra plans was pulling a fast one.
When you upgraded your plan in 2014, you were also sold mobile broadband and SIM-ONLY plans. Goodness knows why because you clearly did not need either.
Three agrees. it has looked at your account details and says neither of these two plans has ever been used.
Therefore, it has done the honourable thing and refunded the payments, totalling £244.62.