Can voluntary contributions increase this state pension?

[MyNameIsUrl]

A woman born in 1954 reaches state pension age in January 2020.

She has 43 years of full contributions, and 4 years when she did not pay enough.

The 4 years not full are:
2015-16
2014-15
1013-14
2012-13

The online screen for each of the 4 years says ’You can make up the shortfall. Pay a voluntary contribution of £780 by 5 April 2023.’

However, I’ve read elsewhere that paying voluntary contributions for years before 2016 will not increase the pension amount. Am I correct?


Contributions shown online up to and including 2018-19
Forecast 153.93 a week
COPE 58.80 a week

[Chrysalis]

I don’t know the answer, but I’m sure mc2fool will. Has she called the Future Pensions Centre, they should be able to advise.

[richfool]

Well I'm not an expert on pensions, but isn't the qualification for max state pension, to have 35 years contributions? If so, then she should have enough already.

[swill453]

Well I'm not an expert on pensions, but isn't the qualification for max state pension, to have 35 years contributions? If so, then she should have enough already.

No, the fact she's got a COPE means she was contracted-out, hence full pension not earned.

Scott.

[mc2fool]

However, I’ve read elsewhere that paying voluntary contributions for years before 2016 will not increase the pension amount. Am I correct?

No ... and yes.

As a generalisation that is not correct. There are plenty of cases where making up pre-2016 voluntary NICs will increase their pension.

However, in this specific case it won't. Assuming she has paid/earned NICs for 2016-17, 2017-18 and 2018-19 then there is nothing she can do to increase her state pension (unless she wants to defer taking it, which will get her an additional 5.8% for each year she defers).

[Chrysalis]

It’s a bit more complicated than ‘35 years’ or ‘no full pension if you have a COPE’.
Contracted out years do not count as full years for the purposes of entitlement to state pension, but it’s perfectly possible to accrue a full new state pension if you have been contracted out - you’re just likely to need more than 35 years in total.
Each individual calculation is specific to the person’s own record, so it’s not usually a good idea to make assumptions. Always best to get the forecast, read it carefully, and call Future Pensions Centre before deciding to make any voluntary contributions.

[swill453]

It’s a bit more complicated than ‘35 years’ or ‘no full pension if you have a COPE’.

That last part is not a quote from my post, and not even paraphrasing what I said.

I said that the existence of a COPE indicated that the woman in question had been contracted-out, and that would explain why she didn't have a full pension after more than 35 years.

I didn't make a general point.

Scott.

[daveh]

I've just been and looked at my state pension prediction. I get the full pension if I make contributions until 2031*. However I'm missing years from 83-91 (which is when I was at Uni (degree and DPhil) and then 91-93. I'm assuming the Uni years didn't count even though I was in full time education. The final 2 years missing years I thought I should have had contributions as I was working in Ireland and I thought there was a reciprocal agreement with Ireland such that those years should count and I have a vague recollection of making some communication about it at the time. Have to go and have a look at my records and see what I can find.


* not sure I plan to be working until 2031 I'm likely to have retired by 2024, guess from then I'll have to make voluntary contributions.

[JohnB]

If you ring the helpline, they won't send you a detailed plan of what years give what benefits, or give advice but they will tap away on their screens and report the pension boost for each year you nominate. So ring them with a clear head and a piece of paper with lots of boxes to be filled.

[mc2fool]

Contracted out years do not count as full years for the purposes of entitlement to state pension

They do count as full years in the calculation, but it's just that the COPE is then applied (subtracted) in figuring the 2016 "starting amount".

[mc2fool]

I'm assuming the Uni years didn't count even though I was in full time education.

Only 16, 17 & 18 year olds used to get NI credits for being in full time education (inc. apprenticeships). That stopped in 2010 (folks who got those credits before then still have them.)

[daveh]

I'm assuming the Uni years didn't count even though I was in full time education.

Only 16, 17 & 18 year olds used to get NI credits for being in full time education (inc. apprenticeships). That stopped in 2010 (folks who got those credits before then still have them.)

Yes I have the years before Uni, which I hadn't realised I was entitled too, I thought Uni didn't count, but was surprised to find that school from 16-18 did. I'll have to check about the 2 years I was in Ireland and see what I can find about those.

[mc2fool]

However, I’ve read elsewhere that paying voluntary contributions for years before 2016 will not increase the pension amount. Am I correct?

No ... and yes.

As a generalisation that is not correct. There are plenty of cases where making up pre-2016 voluntary NICs will increase their pension.

However, in this specific case it won't. Assuming she has paid/earned NICs for 2016-17, 2017-18 and 2018-19 then there is nothing she can do to increase her state pension (unless she wants to defer taking it, which will get her an additional 5.8% for each year she defers).

BTW, there are some generalisations that can be made.

a) if you have less than 30 pre-2016 years, then filling any missing pre-2016 years (only possible back to 2006) will increase your end pension.

b) if you have 30 to 34 pre-2016 years, then filling any missing pre-2016 years (ditto) may or may not increase your pension. This is the complicated case that you have to look into the fine details for.

c) if you have 35 or more pre-2016 years, then filling any missing pre-2016 years will not increase your pension.

In all cases, if you aren't already due to get the amount of a full new state pension or more, then adding 2016 onward years (where possible) will increase your pension, up to the full new state pension or until you reach state pension age, whichever comes first.

Note that for those that have the flexibility to do so, filling 2016-17, 2017-18 and 2018-19 is now a bit cheaper than filling pre-2016 years.

[mc2fool]

I'll have to check about the 2 years I was in Ireland and see what I can find about those.

I know nothing about Irish pensions, but given the traditional relationship between the UK & Ireland there may be a specific bilateral treaty.

If there is not then the pension relationship will fall under EU treaty rules (and will continue to do so if the May/Boris withdrawal deal gets passed), and you will not get any more from the UK but will quite likely also get a (small) amount from Ireland.

Start here, https://europa.eu/youreurope/citizens/work/retire-abroad/state-pensions-abroad/index_en.htm, getting yourself comfortable with a large mug of tea/coffee beforehand, it's complicated.

However, first do try and find out if there's a bilateral UK-Ireland agreement that overrides the EU rules.