Editha

I receive two annuities purchased with pension funds. They are taxed as income, not capital.

Pistolpete2

The one discussed is a particular sort of an annuity - an annuity certain.

Best to ignore it as it is most likely not in the typical mix of annuities taken out.

I'm thinking further about the top-up and in spite of signifying my interest for further briefing from the DW&P, can't really live with the massively increased cost when compared with contributing to voluntary (Class 3) contributions in the regular way at 700 pounds plus per annum to buy roughly 3% of a full pension per annum, meaning that I would have to pay over 20,000 pounds to get to almost where others will be by simply being born two weeks after me and they have to pay just 4,200 quid - Ho Hum! (I have 29 years of conts so would need to pay 6 more years post April 2016 to get a full pension)

I'm thinking that a better thing to do is defer my pension for three years which will cost less at about 19,000 gross (before tax) and I then get an uptick to my pension of 31%+ from there on in. A fair bit more than 25 quid per week - 35 quid and change - for a cost after tax saving of about 15,000 quid.

If you haven't yet claimed your pension no matter where you live you can defer and get full indexation until you do actually claim no matter which country you live in. If you've already claimed, you can only now defer if resident in the UK.

Editha

I agree. Deferring the pension achieves the same result at less cost. I've put a comment to this effect on the thread I started on this topic on the Rovers Return.

I've been scratching my brains to think of circs in which it would be better to buy the top up rather than defer, and you've just provided one example, where you can't defer because you've already claimed and you are not in the UK. Someone who is in the UK but used up their chances of deferral (by claiming, deferring, reclaiming) might also benefit, but in the nature of things this is going to be a very small number of people!

bigglesworth

Apparently the top-up is still in the consultative stage! So we can register our interest- but it has not yet gone through Parliament. Nor can they be definite about it until April next year. There are some suggestions that it will be limited -so best to register now.

My SRA is June 2016, so I am not allowed to buy the top up. I also will not get the new full pension. But apparently they will not be able to tell me what my pension might be under the new rules, as they will not definitively know.

That is NOT what I was told by DWP a few months ago, but I have never had the same answer twice from anyone at DWP.

Editha

It sounds like you are in a similar position to my husband. When we came to Canada in '06 he had 30 years contributions, and was told he did not need to buy any more to get a full pension.

He reaches retirement age after the single-tier pension comes into effect, which requires 35 years contributions for a full pension. So, we tried to buy him extra contributions, but were told he is still barred from buying more than 30 while he is abroad.

bigglesworth

I have 35 years contributions, but still will not get the new pension. DWP told me today that the only people who will get the full pension are still at school today.

rebs

Bit of misinformation there....

you CAN make NI contributions while abroad and it's nonsense to say that only those currently still at school will get the full pension post 2016.

Editha

No, once you have made 30 years contributions you are barred from making more.

Editing this to say I've re-checked. The information we were sent from the HMRC seems to have been wrong. It was probably right at the time, but the time limits have been extended since then: http://www.hmrc.gov.uk/ni/volcontr/whentop-up.htm I'll look into paying the additional.

rebs

Here's a list of who can pay voluntary contributions (that's what we are talking about, right?)....

https://www.gov.uk/voluntary-nationa...-contributions

no mention of only those with < 30 years able to contribute...

rebs

Yes, I should imagine it will have changed - when a full pension was achievable on 30 years conts, they were doing you a favour not taking your money as it would not have increased any pension income.

That's no longer the case now that 35 years are need for the full single tier pension.

Editha

I think I was probably a bit too quick of the mark after the law changed. My enquiry was too soon, and I got an answer as if there were no transitional provisions.

Editha

On the Single Tier Pension and Voluntary NICs:

I've just checked with the HMRC National Insurance helpline. At the moment it is only possible to pay voluntary NICs up to the 30 year mark.

After the Pension Act introducing the Single Tier Pension becomes law in a few months time, 35 years contributions will be needed for a full single tier pension. There will be transitional arrangements to allow anyone short of the 35 years needed to make up the difference.

dunroving

This seems to be a different scheme than the current voluntary NICs.

So currently, if a person is below 30 years they can pay voluntary NICs to bring them up to 30 years, and then if they continue working, they can earn more years and end up with 35 years .... but if they are at 30 years, they can't pay voluntary NICs to get to 35 years? Seems a bit mad.

[The previous comments don't take into account the 6-year rule, etc., just the issue of how many years voluntary NICs you can accumulate]

Editha

NO. That post refers to the pensioners top up.

Rebs, instead of industriously trying to muddy the waters by scoring points, I suggest you actually read the contributions thoroughly and try to contribute something useful to the discussion.

dunroving

I'm getting deja vu ... these two pensions threads are starting to look the same ...