giuliana

I recently applied for a state pension forecast. It stated I had paid 8 full years of nat insurance and I need to pay another 13 to get a full pension. With 8 years I get around 45 quid a week.
I did the same for my husband who is Italian, he also had 8 years but it said you need to have 10 years contributions to receive anything.
Anybody had dealings with this ?? HELP!

Geordieborn

I suspect whilst in the UK you had children and were in receipt of child benefit for 9 years? If so, you would have the required working life number of years (35) reduced by those 9 years, hence get around 8/26 x the current full rate pension. The 9 years would also get you past the minumum 10 years to get any pension.
Your husband if he paid to INPS in Italy (or any other EU contributions for that matter) for 2 years or more can use these to get past the 10 year rule. He would then get about 8/35 of the current full rate UK pension. Either of you may or may not get some small additional factor. HTH

NB Had a further look and see the goal posts changed again 2016 hence the edit

giuliana

Yes I had 2 kids and got child benefit for the 8/9 years in the uk. HTH ?

giuliana

So would it be worth me paying voluntary contributions to increase it? I think class 3 is about 13 pounds a week.

Geordieborn

Giuliana, that one I can't help you with, to me it kind of depends on how long you expect to live! I've never thought it was worthwhile, but in this day and age of poor returns, perhaps it is now?
I recently had a pension forecast and looked at it with horror as it made no sense i.e. it said I had 41 years paid, but would not qualify for a full basic pension? Note my edit on my initial reply, it's 35 years you need now for a full basic pension (£159.55/week currently).
HTH = "hope this helps", sorry lazy me.
On checking mine again, I now know why it looks odd, but it's very complex indeed! My real reason for the edit is to mention that for your husband if he does not have other countries contributions it could well be worth paying 2 years class 3 if he is able to do so.

giuliana

Thanks Geordiborn for your reply and help.
I have just checked mine and I have full ten years of contributions, my pension at the moment will be 45.58 if I continue paying until 5th April 2029 I will get 104.84, does that sound as though they have taken into consideration the fact that i got child benefit for 8/9 years?
Every year works out at about 733.00 X 13 to reach 104.84, in a bit of a dilemma if it's worth it.

Geordieborn

It is very difficult to work out exactly what you should get as there are factors making it much more complex. For example, apparently until the 6 April 2010 the years looking after children were used to reduce the number of years you needed to get a full pension (35), but after that they give you what they call credits for the full year. The amount you quote indicates they have used your years whilst you were looking after your children. You can check this on-line, but you need to be registered with the "government gateway" or have "gov.uk verify", I suspect difficult to register if you are not in the UK. If your forecast states you were "contracted out" in your working life (as they call it), then that's another complication as your pension shown is being reduced because of this (I do not know the calculation/amount yet).
Basically, in your situation as I see it you pay £13 plus for the class 3 stamp per week and get £4.55/week back for it, so 3-4 years to get your money back. The devil is in the detail here, as you may be liable for tax on this pension either in the UK and/or Italy.

giuliana

All the info I got was from the government gateway, I did register even though I have an Italian address. They say I need to pay 700 and odd pounds for 13 years to reach my forecast of 104.84 a week. Something in the region of 10.000 pounds.

giuliana

BTW I was self employed for 8 years in the Uk so paid all contributions, plus 2 years when I was younger. So my time receiving child benefit hasn't been included.

Geordieborn

Yep, like I said 3 years plus to get your return and who knows what changes they may make by then! Just did a quick calculation and my OH will have lost over £35,000 due to the moving goalposts so far... A little thing I thought about, as long as it lasts, there is a tripple lock on pensions, so it's worth a little more in that sense. For us it's not quite so bad as we don't have that many "missing" years we can/could pay. Personally, we are both of the opinion why pay now, we will wait until nearer the time and see what has changed. For you that is likely not an option as I believe there are time limits on paying class contributions.

Geordieborn

Giuliana, go back in (if you can face it) to request a forecast, there is a link there on the forecast to your National Insurance record they are using. It gives all the years and the detail (I've not looked at mine) and tells you if it is a qualified year otr not. In case you do not know, in most browsers you can print the page(s) to a PDF/Opendocment for future reference. I forgot to mention that they also changed the age rule for children credits down to under 12 from 16 in 2010

Serrano

OK, can I wade in with my €0,02 Worth?

First of all, additional years cost (as has been said) about £733/year. Each year gives you a £4.56 increase in pension - a headline return of 32% on capital employed. Which makes it a no-brainer for people approaching retirement age, where both the risks of premature death and the likelihood of legislative change are minimised. This is the situation of my wife.

For people further away from retirement, there are arguments in favour of waiting until the latest possible moment before making voluntary payments (risk of premature death and legislative change among these). However, you need to be careful - at the moment the rule of thumb (there are exceptions, of course) is that you can only pay voluntary payments up to 6 years in arrears. In addition to this there may also be other legislative change in future, but any changes are, shall we say, unlikely to be in your favour! However they are less likely to be applied retrospectively.

Also - regarding the number of qualifying years, the formulae used are complex, as has been hinted at by Geordiborn's comments. Another aspect is that if you have been 'contracted-out' at any time, not only would your maximum pension be reduced but the number of qualifying years needed would be increaded. Again in my wife's case she will have a reduction of almost £20 per week from the maximum (which should be covered by returns from the Private Pension that she had instead). But in addition she needs 39 qualifying years to reach even that.

As you can see, it is complex. Everyone's situation is different. For us, we are looking to pay the missing years asap. Of course, getting definitive guidance on costs and methods of payment is not as easy as it should be (she has just sent off a reminder following her last letter in April, to which there has not even been an acknowledgement).

For more specific information, and to reduce the number of caveats, it would help if you could give us your and your OH's ages.

HTH (as they say)

giuliana

Yes I have seen it.

giuliana

Thanks Serrano, I am 54 hubby 61

Geordieborn

That's worth a lot more than "2 cents" to me Serrano! Just what I was thinking was needed here someone that's got a handle on figures/returns. I'd be most interested in how these figures work out, is that 32% per year?
I would also be interested where you got the information regards needing 39 years if you were contracted out ? I've 100% years contracted out and can't ever make the full current pension even with 39 years.