So I'm only 34 so its more of a query for the future than anything. I've looked online and its said that to get the full state pension you need 35 qualifying years (assuming the state pension is still a thing when I'm at retirement age!). My question is what actually counts as a qualifying year? I worked a full time job for 11 years but currently because I get paid an extra payment for working every Sunday I only have to work 30 hours a week across 4 days, I earn close to what I would get it if I worked a normal 35-37 5 day week. So I work a part time job based on hours but financially I earn what I would do if I worked 35 hours. I did have a period during covid where I was made redudant, had to go on benefits and worked as a bloody pizza delivery driver so I'm expecting that year and half not to count towards it.
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Uk state pension question
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lindsay
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A qualifying year is one where you pay National Insurance for the year, it doesn't matter how much just so long as you pay any amount of Class 1 NI. You can go to your record with HMRC to check your qualifying years.
You should find that if you were on benefits that should also count, but worth checking your record
You should find that if you were on benefits that should also count, but worth checking your record
Just checked, all years are full apart from one when I was 18 after leaving school and took time off. Cheers
Theres a "nice" little caveat that says "this is not a guarantee and is based on the current law". Always feels you with confidence
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You can also make voluntary contributions to "top up" your record later, if you miss out when you're younger. I did that and it made a big difference. However, it's not clear if this applies to the "New State Pension" or not.
The government pages on the subject are here...
www.gov.uk
The government pages on the subject are here...
State Pension - GOV.UK
Calculating State Pension, Pension Credit, eligibility, claiming and deferring
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When I was made redundant in 2016 I checked my NI record using the .gov Gateway and found I was still a tad short for my full entitlement.
However, the difference was two years........once full entitlement 'paid up' (I got a job for a Charity as a fundraiser but gave that up in 2018 for a couple of reasons including that my NI was sorted) I had made 47 years of contributions.
I could not quite work it out how I needed 47 years worth, though between 16 to 19 years old I had part-time/summer holiday jobs and in 1991 from an earlier redundancy I did not "sign on" but found a new job about 6 months later. So my NI record was very slightly fragmented......but still no idea why 47 years???
But @Nebular89 as you say at 34yo just when will your state retirement age be and will the State Pension still exist?
PS at some point, possibly when I was in my late 40's or early 50's I had the letter advising me that I was due my SP at 65 years & 6 months.
However, the difference was two years........once full entitlement 'paid up' (I got a job for a Charity as a fundraiser but gave that up in 2018 for a couple of reasons including that my NI was sorted) I had made 47 years of contributions.
I could not quite work it out how I needed 47 years worth, though between 16 to 19 years old I had part-time/summer holiday jobs and in 1991 from an earlier redundancy I did not "sign on" but found a new job about 6 months later. So my NI record was very slightly fragmented......but still no idea why 47 years???
But @Nebular89 as you say at 34yo just when will your state retirement age be and will the State Pension still exist?
PS at some point, possibly when I was in my late 40's or early 50's I had the letter advising me that I was due my SP at 65 years & 6 months.
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Go and find yourself a good Independant Financial Adviser and take control of your own pension, do not rely on the state or an employer, that way you can decide when you want to retire or reduce your work commitments.
Also try and get any employers to contribute to your pension scheme, if they do it's a tax and NI free pay rise and TBH a lot don't realise it.
Also try and get any employers to contribute to your pension scheme, if they do it's a tax and NI free pay rise and TBH a lot don't realise it.
Mr Bump
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not technically true if you are a very low earner and don't pay any NI you still get you contributions
I fall in that category as i only pay myself from my business £8700 a year (758/month) and pay no NI as I am under th threshold but still get my full entitlement
Mr Bump
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absolutely allways make sure you have maxed out your employers contribs even if you have to pay a bit more yourself its free money
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Yep, start early....pay in as much as you afford (to both the company scheme & your own IFA guided personal pension savings policy/ies) as the state pension is important though not enough to live on by itself!
PS the Ukraine war and other globally financial impacts have hit adversely affected all 'defined contribution' pensions savings because they are shares & gilts based and have shown a dip in in growth in the past 3-5 years
That’s what happens at the moment. I pay in what I believe is the max I can pay in which 6%. They pay in £7 for every £3 I pay I. I did look to see if I could increase the amount I pay but I’m the top tier apparently.
Is it worth getting a financial advisor if I’m not a high earner? I’m not struggling by any means but I don’t have a lot of spare income after bills etc, maybe £200 a month- £400 if I’m really tight
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I believe my state pension will be when I’m 67, it gave a year of 2056.
I do have a feeling the state pension will go, hopefully not before I get it. I don’t want to rely on it but I also want to make sure I’m in the running to get the full pension incase it’s still going
Mr Bump
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I would ask your company more about the pension you/they are in and simply start looking at how they are doing in the market first
The company is Royal Mail, HR is a nightmare! I looked at the Royal Mail pension website and it’s terrible. All it did was give me information and then direct me to Scottish widows who must control the pension. I tried to log in with Scottish windows and they said the type of pension I hold can’t be managed online :s. I only know how much I have in based on a summery letter for the end 2023I would ask your company more about the pension you/they are in and simply start looking at how they are doing in the market first
Worth pursuing. There should be a phone number for Scottish Widows administration department.
Mr Bump
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yeah i suspect you cannot manage the pension yourself as it will be a group managed pension.
what does your summary letter say can you post it with retracted information.
I’ll have a look when im home. It was just a basic run down. What the balance was, what I’d paid in vs the company, how much should be there when I get to retirement age. More like an end of year bank statement than anything else.
Mr Bump
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at the end of the day i suspect it will be a decent scheme Scottish Widows are very good in the market, you are 34 so like says loads more years to pay in to it
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Without going into boring details as a result of discussions regarding pension with an IFA because I have a very serious illness, I get an impaired life annuity (I am not expected to live very long) this pays about 40% more than a conventional annuity. We cannot foretell the future, the last time I was in hospital the chap in the next bed was a bus driver who had a heart attack, he was mid 50's and was unlikely to drive a bus ever again as it was unlikely, he would meet the DVLA medical standard
Yea I’m not worried as such. It just occurred to me I’d never really looked into. I didn’t to be 50 and then realise I had nothing at all
Sounds like it could be worth it then.
Funnily enough I did look into one a few weeks ago. My other half’s mother is going through a bit of a messy break up. He’d let her keep the house but she can’t afford the mortgage payments and will have to sell. I’ve already she should contact someone and try to find a way around it as she only had 4 years left on the mortgage but it’s falling on deaf ears.
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Even if you put say £100 per month into a personal pension plan IIRC the company will claim the tax back of 20% so the level of investment increases beyond the amount you put in!
IFA's used to earn from commission and policy fees but that was ceased some years back. They now earn from either billable time spent managing your interests or a % of the invested fund.
There are government based advice services who should at least help inform you of your options and choices.
So it’s basically the same as having the employer match or exceed what you pay In. I’ll definitely look into it. I have a car loan outstanding at the moment which I should be able to clear in 12-18 months which would free up an extra £200 a month. I’d be able to clear it in a few months in theory but it would wipe out all my savings so any extra money would just go into building that back up. As the interest is all paid on the loan it seems a bit pointless to finish it early
Oh I do have £5k in a pension from my old job at a bank. That’s just sat there not doing much, I don’t think it’s increased much. I was going to change the way they invested that into a higher risk bracket and see what happened. I could move that into a private pension and do the same
Mr Bump
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The thing to always remember though if you pay into a personal pension that is out of your company salary you will have paid tax and NI on it.
As above pension companies can reclaim the tax but they cannot reclaim the NI portion.
When you pay direct from your salary (salary sacrifice) that money comes out before any tax or NI is applied so it is better that way.
As above pension companies can reclaim the tax but they cannot reclaim the NI portion.
When you pay direct from your salary (salary sacrifice) that money comes out before any tax or NI is applied so it is better that way.
That’s true. I’ll have a look around and speak to someone at some point.
Probably makes sense to combine my pensions now then. That £5k is doing nothing, I forgot I had it for 3 years!
Mr Bump
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look at transferring it into something like vanguard
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Ah! I strongly suggest you check whether the bank scheme is a defined benefits (final salary?) one or defined contributions. Though AFAIK the banks ceased final salary schemes a while back so best to check.
If the former you would be daft to withdraw your money IMO
Re: above caution.
I’m fairly saw it’s not finally salary. I remember an older man I worked with that was close to retirement that had a final salary pension, everyone was very jealous. He’d been a manager in London for years and decided to take it easy for the last few years. He’d have been very well off as they made the entire site redundant not just me. He was only a couple of years away from retiring and instead got a massive payout, they basically paid him to retire
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Makes sense......
But do check and get whatever the pension team/trustees tell you, get it in writing.
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I am 33, and seeing this post made me check mine, wow I need a higher paying job haha.... Although I am likely not to live to 71 (if it does go up to that), I really need to start paying more into my private pension and understand the best way to invest.
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yea it’s a bit depressing! My £5k pension from an older job reckons I’ll be able to retire at 95! Granted I’m not paying into that. There’s one slightly confusing figure with my current pension though. It said when I get to 67 I will have X amount each month. But when I worked it out based on the entire amount it would have to be spread over 40 years meaning I’d be living until 107, seems unlikely lol!
I’m not going to worry about pensions and investing too much until I’m clear of debt in hopefully 12-18 months.
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