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** Paying NI even though maximum qualifying years reached???? **

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Apologies for banging this in under 'employment problems' but I couldn't find anywhere else on the board that might be appropriate -- and it does relate to employment, anyway. Here's the situation:

 

My sister-in-law was born in March, 1952. She had, like countless others, expected to be able to retire with a State pension at the age of 60. In her case, that would've been March, 2012.

 

But, also like countless others, she has been told that her State retirement age has been extended -- in her case, by 1 year and 10 months. So her retirement date has moved from March 2012 to January 2014.

 

To get the basic State Pension, she needs 30 qualifying years. She has actually worked full-time, and paid NI, since the age of 16. She has never been out of work; she has never had children.

 

By the time she reaches her revised retirement age, she will have paid almost 47 years' worth of NI contributions -- that's over 50% more than the minimum number of qualifying years for the State pension.

 

From what she's been told, the fact that she's already paid the equivalent of 44 years doesn't make any difference. As long as she is in employment -- and sadly, she can't afford not to be -- then she must continue to pay her monthly NI.

 

On the face of it, this seems inequitable, but of course, pensions are complicated things and the State system is no different. So what she's wondering is:

 

1) Assuming she continues to work until January 2014, will the 17 years' contributions she has paid over and above the minimum qualifying 30 years actually count for something?

 

2) If so, how will it be accounted -- will she get Additional State Pension, or Graduated Retirement Benefit, or whatever else might be the correct name for this?

 

As said at the beginning of this post, apologies for placing this thread here. But as I'd love to be able to clarify things for her -- and I'm no pensions expert! -- I thought I'd try here, in view of the help and expertise CAG's posters seem unfailingly to be able to offer.

 

Help appreciated -- thanks!

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Hello there.

 

I'm not authority on State pensions, but I may be able to kick this off. I had a look at the directov website and found something that refers to people born before 1950 and it says the minimum number of qualifying years from memory is 39 for women and 44 for men. I couldn't find the section for those born after 1950, which I know your sister in law is, but you might if you have a look around directgov.

 

How many qualifying years do you need?

 

The number of qualifying years you need for a full basic State Pension depends on your age and whether you're a man or a woman.

Men born before 6 April 1945 usually need 44 qualifying years.

Women born before 6 April 1950 usually need 39 qualifying years.

 

Men born on or after 6 April 1945 need 30 qualifying years.

 

Women born on or after 6 April 1950 need 30 qualifying years.

 

To find out more about the State Pension, you can download the leaflet 'State Pensions – Your guide'.

 

 

 

 

I think the answer to whether she continues to pay is probably 'yes' and that contributions stop at retirement age, as they did when it was 60 for women, sorry.

 

In addition, the State may pay Graduated Pension if she made any contributions, or SERPS. However, if she opted out of SERPS via an employer's or personal pension scheme, then the other scheme would pay the SERPS part of her pension.

 

I'll double-check about Graduated and SERPS in a minute and edit this if I need to.

 

My best, HB

Edited by honeybee13

Illegitimi non carborundum

 

 

 

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Well, it doesn't seem to have changed since I last looked at Graduated Pension and SERPS. Just to add that your SIL can ask for a pension forecast via directgov if she hasn't already looked at that.

 

My best, HB


Illegitimi non carborundum

 

 

 

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Honeybee: thanks so much for your help -- sorry to be a nuisance. SIL is as hazy as I am about SERPS (?) and Graduated Pensions so thanks for your tip about the directgov link, methinks I'd better head over there to start unscrambling some of the jargon! And yes, a pension forecast seems definitely to be in order now because though she will have paid 50% more in contributions than is necessary to qualify for the minimum pension, I don't see her getting 50% more than the minimum pension -- surely, NI contributions also go towards the cost of the NHS?

 

Thank you again, much appreciated.

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Hello there, you're welcome. I think the 30 year figure you have applies to something else, maybe to do with SERPS. I did notice it while I was looking on directgov. I think the relevant figure is more likely to be 39 years or a bit more, for State basic pension.

 

I hope directgov works, please post again and I'll help if I can.

 

My best, HB

 

PS. SERPS = State Earnings Related Pension Scheme, from memory.

Edited by honeybee13
PS

Illegitimi non carborundum

 

 

 

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