44 years of NI conts to get full state pension ???

Why would someone have to make 44 years of NI contributions to get full state pension

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Client has just done a pensions check to see what his national insurance record will earn him in state pension.

He was advised he has 39 full years of contributions which will earn him 137.59 per week but he has to make another 5 years of contributions before 2027 to get to the maximum of 159.55.

I don't understand this because I thought you only had to make 35 years of full contributions to get the full new state pension. He is being asked to make 44 years

Replies (8)

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By Duggimon
20th Nov 2017 16:25

Was he born before 6/4/1945? The criteria in that case is indeed 44 years of contributions for a full state pension.

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Replying to Duggimon:
By Dib
20th Nov 2017 16:37

If he was born pre 6/4/1945 he would already be well past retirement age though!

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Replying to Dib:
By Duggimon
21st Nov 2017 09:21

That's true, but what constitutes a "full" pension for someone born that long ago is a fair bit more than a full pension for those born after, that's the give and take for needing the longer period.

I would expect the pension forecast for this particular person is already higher than the current basic state pension for those just reaching retirement age, given 39 years of contributions.

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By K81
20th Nov 2017 16:57

if he had any contracted out periods then he needs to pay longer to make up these years.

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By anneaccountant
20th Nov 2017 17:12


Why would being "contracted out" require more contributions if you have already made 39 years of full contributions?

I must admit trying to understand how NI contributions and the state pension fit together is like trying to wade through glue.

I thought I had it sussed last week. Each year of full NI contributions adds 237.10 per annum to your state pension; 35 years at 237.10 equates to the new state pension of 8,297 pa which is 159.55 per week.

Clearly in some circumstances .. not!! Hey ho!

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Replying to anneaccountant:
paddle steamer
20th Nov 2017 18:43

Because you have gained another pension from the contracted out payments, so there is a calculation (which I do not understand) that catches this up, taking one to the full "new" pension plus the one earned by the contacting out outwith the state scheme..

I have the same with mine but no complaints as my contracting out contributions will, by the time I retire, likely buy me a second sustainable (drawdown) pension at a level similar to the basic state pension.


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Replying to DJKL:
By mumpin
21st Nov 2017 12:09

It just seems like a slight of hand swindle from the DWP.
You maybe contracted out for 3 years out of 40 but your state pension payment drops by (say) 15%.
Its a con!

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Replying to mumpin:
paddle steamer
21st Nov 2017 14:02

Not really, you still get the old basic state pension you had earned including any add on re additionals etc you had within the state scheme, the original you had earned remains as the bottom line, you cannot drop below this.

However your qualification for the new does get reduced re years you contracted out as you actually paid in less than someone who was not contracted out, seems fair, you have that money in another pot.

You in effect start at the higher of the two, original you had or new less reduction re contracting out.

Of course it does depend on your past earnings and how much contracting out rebates your scheme received and how well they were invested, as I said I currently get the full original basic pension (actually slightly above as have 40 basic years (paid NI whilst at school and University as also worked) plus some additionals plus the amount that can be paid with my contracting out contributions (in a SIPP) which currently is about £7,000 per year (about 175,000 fund at 4% if invested in income ITs).

As I am currently 57 by the time I hit retirement age of 66 I will likely be back very close to the full new pension (as am adding minimum £4.45 per year towards it over say next 10 years if I keep working) and had fully earned the old basic pension, so I will have this plus the contracting out scheme fund (assuming further growth at only 4%p.a. (the dividends)) which will likely be nearer £259k when I retire ,which could add another circa £10,000 a year.

So receiving circa £18,000 p.a. (£8 +£10) between them, with flexibility to be able to lift 25% of the contracted out fund tax free (It is actually now merged with my money purchase SIPP) with a drop in income if I do, and being able to take the contracted out fund early (now if I want), does not seem awful, however each case will be different.

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