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 ?

No NI credits for being a SAHM when my children were small. Low paid temp work when I paid reduced rate (Married womens) NI contributions for some years. That option ceased a long time ago. My occ pension is thankfully a little more than £47 a week!

@Ginmonkeyagain We aren't going to agree on this and perhaps there should be more of a contributions based element for higher rate tax payers, then again, they do get 40% tax relief on pension contributions.

Yes i know the NI isn't ring fenced, something people don't always realise.

For me a state benefit is something free, a safety net if you like, the state pension is something we have "paid into" to qualify (for want of a better phrase)

They should not have told you that. For a start it is financial advice, which cannot be provided because they are not authorised to advise. Secondly it may be wrong, depending on how long you live, inflation, interest rates/investment returns and how much you depend on income v. capital.

Wow. Im on benefits. Feeling pretty shitty now

Then I await the drip feed with anticipation.

A full year of class C NI contributions is about £800 and is guaranteed to give you about £5 per week, index linked for the rest of your life. That is about £250 per year...... a return of about 31%.

You would need to invest at least £8,000 to get anywhere near that return, and that would come with no adjustment for inflation. To get a guaranteed, index linked return would cost a lot, lot more.

Investing £3000 will give you nothing like the return you would get by filling in gaps on your NI record.

Excellent. Did this for a client a few years ago, couldn't remember the figures.

@Moonicorn whos drip feed?

So confusing.
May I please ask, if Government Gateway shows you quality for full state pension, do we believe it?
Because of the news we all need to check our pension forecast as we can only fill in the gaps by April 2023, I was talking to my sister about this today.
She took early retirement (because she could, redundancy so it works for her), had 3 years of contracted out situation but otherwise her profile shows 41 full years of contributions.
Not working anymore so she doesn't need to pay NI (only voluntarily if she wants to as far as we understand). Is this correct? We can't ascertain for sure.
The forecast shows she will get the full state pension when she reaches pension age. There is no indication that additional contributions are required for this.
How do we know that is correct?

My own profile shows I'll get full state pension if I contribute fir x number of future years. So that was clear and simple.

But reading this thread just made us question her own situation.

There is no such thing as a contractual right to a state pension based on “the law of the land”.

If the UK government wanted to abolish the SP it could do it tomorrow. You haven’t a “contract” with them, you couldn’t sue them, and you certainly couldn’t use as an argument that some sort of nebulous “law of the land” required the government to provide it to you anyway. It’s nonsense.

Indeed. Exactly that.

Because of the news we all need to check our pension forecast as we can only fill in the gaps by April 2023.

That isn't true. Normally you can fill in gaps going back 6 years. At the moment that's been extended beyond 6 years, but will revert to 6 years again from April 2023.

It’s not really scandalous no because you’re only in this situation because you chose to contract out and pay less NI. You should also have a private pension if that’s the case

Exactly- it’s a contribution based benefit. It can be abolished at any time

State pensions currently cost uK gov about £100billion a year.it’s a lot

So, OP. In conclusion you're projected state pension is reduced as you contracted out of SERPS/S2P for a number of years enhancing your workplace pension rather than paying full NI contributions towards state pension accrual. Mystery solved. If anyone is at fault it is the administrators of your workplace scheme for not telling you about this, or you for not taking this on board. But you now have the option to use a small amount of capital to make up for those years where you contracted out and receive a full BSP. Up to you, but by feeling is that unless you plan on dying in the next 2 or 3 years, are already in receipt of a high income or literally do not have the money, it is probably a good idea to do so.

There are many debates to be had about state benefits and when and how they should be paid, but irrespective of that, you have not been done over.

Nobody is saying this would be a good thing, and maybe at best you could argue that having to pay NI for the reason set out by the government - to obtain a pension - would make it remarkably unfair if they did abolish it, but governments do remarkably unfair things all the time.

The UK government has been increasing state pension age gradually, changing the goal posts for many on this thread. If we all had contractual rights as @pissssedofff says, then how had it been possible for the UK government to do that?

Ridiculous argument... no Govt is going to abolish the SP pension, they all want to be re elected!
I have had several contracts of employment, various employers have changed my T&C's & aside from resigning, there is nothing i can do about it, all they have to show is a business need, consult and be reasonable

Yes Govt have changed pension ages and normally with many years of advanced warning.

Contracts are not set in stone.

You do not have a contract with the UK Government to provide you with a pension, @pissssedofff. Contracts of employment are entirely different, because they are actually contracts. And yes I’m well aware that a contract need not be in writing, but it needs to be in some form other than you thinking one exists due to “the law of the land”.

You have an expectation of receiving the SP but no more than that. You may be right that it’ll never be abolished due to it being electoral suicide but that doesn’t change the fact that it can be.

Yep, a crock of shit alright! I work part-time just above min wage and upped my hours without realising I would be paying as much as £70 tax p/m!! I then pay £65 into a pension (NHS) I hardly earn enough to cover that, bills, run the car to get me to bloody work in the first place. It certainly feels that work doesn't pay as a pp said.

@fitzwilliamdarcy Good, at last you agree, we have an expectation and thats good enough, just as i have an expectation of school for my kids and healthcare for my medical needs.

Contracts can and do change & of course Parliament can change the law and abolish the SP or state health or education but realistically, it will never happen, as i keep saying they want to get elected.

So does your husband have SERPS/S2P? If not he has a private pension that has increased due to his contracted out payments. If he was contracted out he wouldn't be getting £45 extra.

Sorry that should have been to Seymour not Viques.

I’m glad that you now understand that the SP is not a contract but an expectation that you have, and that what you expect might not happen because the SP can be abolished.

That may be unlikely (I disagree, I think it will be abolished) but it doesn’t mean that it cannot be done. If it is done there is nothing you can do as you have no contractual rights.

Your sister will get the full state pension when she reaches state pension age. She has enough contributions and the website is saying she will get a full pension.

I'm in the same position as I have 39 years of contributions. I've already qualified for the full state pension. However I'm still paying NI as I'm still working.