Jump to content

UK Pension -voluntary contributions


parischic
 Share

Recommended Posts

After waiting almost 7 months, I finally had a reply to my letter to the Pension Service in Newcastle!  I’ve been informed that if I pay voluntary contributions of £626.60 for each of the next tax years 2011,  2012, 2013 (i.e. £626.60x 3) I’m entitled to a pro-rata State Pension of 29% (£28.32 a week). This will be increased by 10,4% for each year I delay retirement, past 60. Or I can take this as a lump sum - does anyone know how the lump sum is calculated ?

 

Considering that the French CNAV has translated my years worked in UK as 35 “trimesters” (just 5 “trimesters” short of the 40 (10 years) required for the UK state pension, it seems a little unfair that I have to pay voluntary contributions for 3 whole years.  Yes I know that the French calculate pensions in “trimesters” and the UK count full years only. I’ve thought of contacting the Pensions office to ask them to reconsider & try to negotiate a deal. Would this work ? Has anyone had a similar experience ?

 

Thanks!

 

Link to comment
Share on other sites

[quote user="parischic"]

After waiting almost 7 months, I finally had a reply to my letter to the Pension Service in Newcastle!  I’ve been informed that if I pay voluntary contributions of £626.60 for each of the next tax years 2011,  2012, 2013 (i.e. £626.60x 3) I’m entitled to a pro-rata State Pension of 29% (£28.32 a week). This will be increased by 10,4% for each year I delay retirement, past 60. Or I can take this as a lump sum - does anyone know how the lump sum is calculated ?

 

Considering that the French CNAV has translated my years worked in UK as 35 “trimesters” (just 5 “trimesters” short of the 40 (10 years) required for the UK state pension, it seems a little unfair that I have to pay voluntary contributions for 3 whole years.  Yes I know that the French calculate pensions in “trimesters” and the UK count full years only. I’ve thought of contacting the Pensions office to ask them to reconsider & try to negotiate a deal. Would this work ? Has anyone had a similar experience ?

 

Thanks!

 

[/quote]

I had the opposite experience of calculation.

The UK uses weeks, and France accepts only full trimestres, so my French pension fell short of what I would have received if calculated in the UK way.

Link to comment
Share on other sites

One of the things that is not made clear in the letter the Pension's People send is that the amount calculated to top up your contributions is based on the NI contributions for this current year and if you defer paying ( as we did ) of the period they say you are entitled to deliberate it over, the top up contributions can rise quite steeply.

In our case because NI contributions had risen sharply over the years it took us to get around to topping up the contributions and it became uneconomic

My wife would have been in her late 80's before we clawed it back. And a buck in the hand is worth..........................

Its also not mentioned in the letter that the rules are changing on entitlement

Now the entitlement rules have reduced down to 30 qualifying years topping up should not be required by most people

JB

Link to comment
Share on other sites

I always used to pay what I think were called Class 4 contributions to make up the years that were lost as I worked abroad. They used to give seven years to pay it I think. This was a few years ago now, but I calculated that the pension was worth the interest off £100,000 and therefore was a very good deal, especially when they sent back a cheque saying that the number of total contributory years had dropped to 30 and that therefore I had enough to get the full State pension. Which I shall have, inshallah, at the end of next year.
Link to comment
Share on other sites

Unfortunately I'm still no clearer about my particular case (I worked in UK sporadically from 1963 - 1979 before settling in France in 1980) so I reckon another detailed letter or email to the Pensions Office is in order ( and another 7 months wait !) As for voluntary contributions there are 2 rates :  Class 3 and the cheaper Class 2, which means in order to be eligible to pay the lower rate, I have to give the name and adress of my last employer in UK before I moved to France. I'll get there in the end - just requires lots of patience! Meanwhile Im waiting till 65 to claim my French pension so as not to have a "décote"  .
Link to comment
Share on other sites

[quote user="idun"]We recieved a letter recently stating that my husband should continue paying voluntary contributions to cover me. The 30 years is for him, but the rules with the 40 odd years continue to cover the spouse.[/quote]

Your post doesn't seem to make any sense! What do you mean by "40 odd years"? My wife recently received her state pension based on 30 years and I am due to receive mine in a couple of years based (I hope) on 30 years as well. Is there some rule I have missed based on the sex of the claimant?

Link to comment
Share on other sites

[quote user="idun"]If people defer their state pensions for a specific period they can get a lump sum, but I'm sure that it is taxable.[/quote]

Again there is nothing specific in your post - can you give a reference on the UK pensions site?

Link to comment
Share on other sites

This subject has confused me too! I got a letter from DWP asking if I wished to top-up my contributions; I currently have 41 years full contributions. Then the letter went on to tell me that the qualifying number of years is now 30.... so why would I want to buy more??? How about a refund? [:)]

And while I'm getting steamed up about it, why does the governemnt reduce the number of qualifying years when it clearly can't afford to pay the pensions in the first place? surely they should be increasing the qualifying period if anything, along with raising the pension age?

 

Link to comment
Share on other sites

Copied from the Direct Gov Website

Choices you have at State Pension age

State Pension age is not the same as retirement age. Retirement

age is when you choose to retire, but you can still work after State

Pension age.

When you reach State Pension age, you can:

  • stop working and get your State Pension
  • carry on working and get your State Pension as well
  • carry on working and put off claiming your State Pension

If you put off claiming your State Pension, you may

be able to get extra State Pension or a lump-sum payment when you do

claim it.

If you go on working after State Pension age, you don't have to carry on paying National Insurance contributions.

JB

uote]
Link to comment
Share on other sites

Voila!

http://www.pensionsadvisoryservice.org.uk/state-pensions/deferring

http://www.direct.gov.uk/en/pensionsandretirementplanning/statepension/statepensiondeferral/dg_10027570

http://www.direct.gov.uk/en/Pensionsandretirementplanning/TaxandNationalInsuranceinretirement/GettingyourtaxandNationalInsuranceright/DG_10021384

From this web page

Bereavement benefits and qualifying years

It's important to note that if you reach State Pension age on or after 6 April 2010 eligibility for bereavement benefits (payable if someone dies to their spouse or civil partner if under State Pension age, and based on the deceased's National Insurance contributions) will remain at up to 39 qualifying years for a woman and up to 44 for a man. You may want to take this into account when deciding whether or not to top up your National Insurance contributions.

And this is now a choice for us. He has already over paid on his number of years ie around 33 years now, when only 30 are needed just for the pension, so we could just continue or not. And we have decided not to.

So sorry I have made the page BIG, but I just copied the links
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...