Glasgow Girl

Because of the way the pension is now calculated, only the first 30 pre 2016 years have value so be careful not to add any more than you need to get to 30. Each post 2016 year will count. But absent that constraint you should inform them of which years you want to back fill and clearly the Class 2 years are the right ones.

tdrinker

I think all pre-2016 years will have value (up to 35) if you weren't contracted out for any of them. But if you were contracted out, only 30 years will have value.

Glasgow Girl

You are correct, I forgot about that.

Pulaski

So before I left the UK I actually contributed for 17 years (as many as 11 were contracted out, but at least 6 of those 11 were fairly low paid), and I had 2 deemed years (I am discounting a third deemed year because it overlapped with one year of actual (non-contracted out) contributions.

Then between 2008 and 2015 inclusive, I made additional voluntary Class 2 contributions for 8 years (might only be 2009-2015/ 7 years).

Am I correct in thinking [1] that even using the least advantageous year count (including deemed years) I have no more than 27 (17+2+8) pre-2016 qualifying years of contributions? [2] Or do I need to include my 2016 Class 2 contribution, which would make the total 28?

Either way it sounds like [3] I should currently be able to make contributions for 2006 and 2007 that would count towards the 35 years I currently need to max-out my UK state pension value?

I need to phone the DWP and see if they can give me (or mail) the Class 2 amounts for 2006 and 2007, as my preference would be to lock in payents for 2006 and/or 2007 while that is still possible, even if it costs me an extra £100+ over the very low number I was given for 2021 Class 2 (some sort of COVID relief?), to give me the greatest flexibility in the event of further changes to the qualification rules between now and my retirement (which is not imminent, or close).

tdrinker

2016 = tax year 2015/16 ending 5 April 2016, so it depends what tax year your 2016 contribution was.

I don't know why 2021 class 2 would be lower than an earlier year, as the rate tends to increase a little year on year, e.g. (I believe) it is £3.15 for 2021/22 and 2022/23 and £2.80 for each of 2015/16 and 2016/17.

In your place, I would ensure I had 30 years' payments by 2016 (tax year 2015/16), because as you say, even though you have plenty of future years available to contribute before you retire, the rules or rates could change.

Pulaski

I agree I was sloppy about the year naming convention, but was following the post I quoted, which is a poor excuse.

In any case I have made contributions for both years, 2015-2016 and 2016-2017, as well as continuously for the years before and after, so the real question would be how many years I can make contributions for since 2005-2006 (which I think is the earliest year that is still open for me), but in any case is at least 2006-2007 and 2007-2008, so the 2 years I specified in my previous post above, but could include 2005-2006 (if that is still an open year for contributions?) and 2008-2009 if I didn't contribute for that year, again as described above.
Beats me too, but I have a bill in my desk for a tiny amount, I don't recall the actual amount, but is was less than £20 for the entire year. As I hadn't paid it, it was repeated on the bill for the following year, which gave the amounts for both years.

Glasgow Girl

The ability to backfill anything other than the prior 6 years ends on 5 April 2023, so if you are depending upon DWP to get you the information then you will likely miss the deadline. The rate for the prior 2 years is the rate in force had you made the payments in that year but going back any further than that you have to pay current rates. I would contact them pronto. Absent feeling very good about when they will get back to you with the necessary information I might send them a letter with a check for the pre 2016 years that you want to backfill calculated using the current rate.

Perhaps send them a check for each individual year you are trying to backfill. That way they can cash whatever years are eligible and send back what is not eligible. If you send one check and it includes non eligible years you may miss out altogether.

Pulaski

Thank you, that sounds like the best advice at this point - though it still leaves the slight uncertainty over which checks the DWP chooses to deposit, but I will do my best to impress upon them my wish to pay for the still-open 2016 years over the most recent one. .... As I only need three more years to reach 35 years and therefore maximum pension under the current rules.

Glasgow Girl

If you only need 3 more years and you will qualify for the future 3 years it would be a lot easier just to continue to pay for the next 3 years. You wont save very much by trying to backfill pre 2016 years since you have to pay 2022/23 rates anyway. The increase for the next 3 years is likely to be small enough that it is not worth the time and hassle of backfilling 2016, given that that you are unsure of exactly which years are eligible and the time it will take. It’s unlikely any major changes will come into effect within the next 3 years, government wheels turn slowly.

tdrinker

Although as you were contracted out for 11 years, you probably need 38 years' NI payments to get a full pension. Best option is to follow Glasgow Girl's advice, including contacting HMRC because you really need an official statement telling you how many more payments you need to make for a full pension.

Pulaski

Nope, I already have DWP advice in my hand on that point - as described here, above, that I only need three more years of contrubutions (35 total, despite the years I was contracted out), and which was why, based on other advice I already received above, I specifically mentioned the number of years where I was contracted out but was also low paid, as that appears to be why being contracted out has had negligible impact on the number of years I need to make voluntary Class 2 contributions.

tdrinker

OK, missed that. I thought the contracted out (COPE) adjustment would always mean the old pension was higher at 2016, but clearly not.

So, either:

1. Contact DWP and find out which backlog years you can fill, and fill them. Or if you're unable to contact them, simply send them the payment with a covering letter for any years you know are unfilled, albeit this might lead to a period of uncertainly as you wait for your record to be updated to see if it panned out correctly.

2. Fill them going forwards.

3. Wait until you are about to retire, and back-fill 3 years at that time when you know it's worth it based on your personal circumstances and the pension rules at that time (they may have changed, e.g. be means tested).

Personally, I'd try and fill them as quickly and with as little uncertainty as possible to minimise the time spent dealing with it, but others would do it differently.

Pulaski

Between the (at least) 2 years 2006-2009*, the 2 years I currently have a bill for (and am about to pay), and the 32 years I have already paid, I will have 35 years fully paid before the end of the 2022-2023 tax year.

* If for any reason I am not able to back pay those post 2006 years, I will be fully paid by the end of tax year 2023-2024.

Then all I need to do is sit back and watch for any changes to the qualification rules between now and when I retire.

Prog1

I only came across this thread a couple of days ago! I was in a bit of a panic thinking I was not "grandfathered in" with my existing 30 years of Class 1 and 2 contributions. Eventually, I managed to get on the website and get a pension forecast using my passport and driving license (in July I tried with the only options available then and couldn't get verified).

Even after reading the thread I am still not sure how many more years I can contribute to maximise my pension as I was contracted out for a time. Also, is it still possible to contribute? Can I just send them a cheque and a cover letter for the relevant years (this is what I did before)?

Here's my situation:

1) I have been in the USA since 94 and I am 64 now.
2) I made voluntary contributions in 2009 and 2010 to get myself up to 30 years (actually 29.73 years due to an anomaly I won't go into now)
3) From the website: I can contribute for any year after and including tax year 2009/2010 (around 824.20 for most years)
4) The current pension estimate is 157.28 weekly if I don't continue to contribute (before COPE is deducted)
5) My COPE amount is 16.39

Hoping you can give me an idea about how many contributions I can still make before I give DWP a call? Seems like this should be possible to calculate using the COPE amount and the current estimate above.

Thanks.

Pulaski

Well generally you can pay for the current and six preceding years, upto a maximum of 35 years. Depending on your circumstances/ income when you were contracted out it may be beneficial to contribute for additional years beyond 35. If you apply you may be eligible (it never hurts to ask) to make Class 2 contributions, which are currently approx £160/yr.