To be shocked if this is true . State pension and benefits …?

[Springtimesoo]

I have worked all my life apart from
4 year degree( 3 year plus prof qualification )
and
a period at home when I had 2 dc under two and we could not afford nursery fees.

have just checked my pension forcast Which says that although I have paid 35 years in full , i will not get a full pension .

it seems that to get a full pension i need to pay just over 3k .

my friend , who is by choice long term unemployed. ( long story) says that she will get a full pension as she is on benefits .

how is that fair ? Its not true is it ?

@Springtimesoo In 2016 there was a change in qualifications for the State Pension. Men born before 6 April 1951 and women born before 6 April 1953 remained on the rules for the basic state pension. Those born after those dates instead would need to meet the rules of the NEW State Pension

In BOTH State pension schemes, if you were ever contracted out of the state pension you paid LOWER NI contributions at the time. This would apply if, you were in certain earnings-related pension schemes at work (such as a final salary or career average pension) before 6 April 2016 and/or workplace, personal or stakeholder pensions before 6 April 2012. The idea was that your workplace pension would, at the minimum be as much as the extra state pension would be - usually considerably more.

So - you now have to decide whether to pay the £3K as a one off, so that you can get the full rate of the NEW State Pension or leave things as they are. You need to find out how much extra you will get every week if you pay the £3K and at what age you will then recoup the extra £3K. Then you need to decide whether you think you are likely going to live that long

As an example, (and these are just random figures), Let's say you qualify at the moment for £180 per week - and paying the £3k will qualify you for £185 per week. So the benefit is another £5 a week. Divide £3000 by £5 and that means it will take 600 weeks of receiving the New Pension before you break even. 600 weeks = 600 divided by 52 = approximately 11.5 years. On the other hand if the difference is only £2 per week by paying the £3k then it would take you 1500 weeks to break even (nearly 29 years to break even)

I never fully understood what contracted out meant when I was 19 ish, in the late 80’s. We had someone turn up where I worked, had a meeting with everyone and we all just did it.

Haven't RTFT but have you checked it here OP?

www.gov.uk/check-state-pension

Did you work part time more than 19 years ago? My weekend and University part time jobs have all contributed to years that count.
If your 1 year off straddled a tax year, you may have earned enough from the parts of those years you worked for them to count too.
Can't help with the 21+11=35 thing...

As far as the friend is concerned, she may very well qualify for a pension, but it depends exactly what benefits she has been receiving all these years. The likes of carer benefits, or SOME other benefits are given as credits for NI. Which is right, of course if people REALLY can't work because of their circumstances otherwise they would be being discriminated against

Try not to compare the 2. Your friend has been on benefits for years and her income has been very low for years and years. You, on the other hand, almost certainly have been better off all those years, while you worked. If you have been contracted out before 2016 you almost certainly will still have a better income in retirement than your friend will?

God knows how. Have you included your pension contributions in your calculations?

‘Benefits’ can mean a multitude of things and there are people (like me for example) who are financially doing fine but cannot work. Disabled people for example or people like me who gets carer’s allowance for being the main carer for my autistic DS, and which because of that, I cannot currently work.

During the time you get carer’s allowance for example (£67 a week), you aren’t building up your NI and so NI is paid in full for you. We are claiming carer’s allowance for me so that my NI/pension is protected, which for us is far more important than the £67.

It's really just psychology that's causing some people to feel hard done by.

At the time, contracting out was seen as a good thing (pay less National Insurance - hurrah!). But at that time there were two elements, which most people probably didn't realise: the basic state pension and the additional state pension. Think of the state pension as financial safety nets: everyone paying NI would receive the basic pension safety net. The second safety net (the additional pension) was only needed by people who didn't have a work pension to pay into. Those who were paying into an employer's pension scheme had that as their second safety net, therefore they didn't need the extra government safety net (the additional state pension).

Which was fine until the government simplified the state pension (and actually increased it) into a single payment instead of two levels. Now people hear the words "you're not entitled to the full state pension" and feel they've been cheated of something. Whereas, using the old terminology, they're entitled to the basic state pension but not the additional element, because they have their work pension instead.

Some people may have been disadvantaged if they retired soon after 2016 when the change was introduced, but for many people who are still working their NI contributions from 2016 onwards may well be enough to raise their entitlement up to the full amount, so they won't miss out.

Thank you

after much googling I think you can also send a cheque in with a letter .. as it’s a small amount I’m going to do that and see if they cash it .. if not I’ll be on the phone on hold too

Surely for the period when you were home, you got child allowance - which gives you full ‘Home Protection Payments’ until you no longer claim child allowance= full NI for that time

My ex son inlaw has never worked, he has 5 or 6 children with 3 different partners, has now settled with the last one, have two children with her, he's 46 and doesn't want to work and seems to get away with it.

The state pension is dismal right now.

It ain't gonna get any better...

Yes

This is another issue that is never discussed.

@SamBeckettslastleap @Schoolchoicesucks @StatisticallyChallenged Bloody baffling, isn’t it?! 😖

OP stop whinging
I have already got 44 full years of employment and got another 7 years to go before i get state pension so 51 years in total. That is despite having 2 children DH will have 52 years of contributions, when he retires.
Why are we that have over paid suppose to subsidise your luxury of not starting work until you were in your 20s and taking time off to have children.
I

Finding out you need to fill in the gaps in your NI contributions may be shocking but you wait until you try contacting HMRC to get your 18 digit reference number so you can make the payment. They just don’t answer the phone and at a cost of 21p per minute it’s ridiculous literally hours on hold, still haven’t got through. The future pensions helpline is better you don’t ever get to speak to anyone but at least it’s free.

I was about 18 or 19 at the time too. I’m pretty certain, like 99%, that we had to sign something to say we’d got independent advice and understood it and were happy - I doubt that was actually true for a lot of people. I’ll see if I can find the paperwork from all those years ago and see what it said.
My company at the time, unfortunately, chose Equitable Life for their provider, so I ended up losing out when they had their issues. Not sure if that means I’m worse off overall or not, I’ll have to work it out.

It is true. If you have been on benefits all your life you will get a full state pension - as pension credits. It's a bit bonkers really. But the government have to give people money in their old age. I have two tiny pensions and am just over the threshold for any benefits whatsoever. I wish to god I hadn't worked. I'd have been better off. I'm not benefit bashing, but there is something very unfair about the system.

You get 3 years of NI credits at 16, 17 and 18.

There certainly are. If you were in a contracted out pension scheme which many people (including me) were. I need 43 years' contributions to get the full amount.

Your friend has been on benefits for years and her income has been very low for years and years. You, on the other hand, almost certainly have been better off all those years

This old chestnut 🙄 many many people claiming UC are better off than those that don’t because they are ever so slightly over the threshold.

But how would it help anyone or anything to make that man starve on the streets? Because that is the alternative. To have a decent stable society we need everyone to have at least a basic standard of living. Some people will take the piss, but that is the price we pay and it is worth it (or would be as a basic standard of living is slipping put of reach for some right now).

I was told by FPS that I could not go back further than 2016

How is that relevant to your pension forecast?

I will get my pension this year. I have 37 years full contributions - but I had to pay in to them myself as I was overseas for several years. I also have another government pension which I think affects how much I get (SERPS or something). I've phoned the tax office several times and they were not very professional. Couldn't really explain just blathered on about new system and old system. Anyhow I get this later on this year
...oh, I couldn't cut and paste
it says I will get £185.15 a week £805.07 a month, £9660.86 a month.