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I've checked my State Pension forecast and it seems that, based on contributions
to April 2016, that I will be entitled to Â£137 a week when I retire in 2030.
My forecast if I contribute another 5 years before 5 April 2030 is Â£155.65 a
In big, bold print it tells me that Â£155.65 is the most I can get.
(1) what happens to the contributions I make between 2022 and 2030 seeing as they
don't increase my pension?
(2) I'm currently paying Â£3,800 a year in NI.....so I pay in another Â£41k until
I retire to get an additional Â£900 a year on my pension? So I need to live to
about 110 to get full value out of my contributions?
Yes it does. I've already retired early and have checked my state pension
contributions. I've comfortably exceeded the required number of years but don't
get any extra when I get the new pension.
The 'required' number of years to earn a full State pension when you started
contributing was 44, which I doubt very much if you have exceeded. It was supposed
to cover the whole of a working life from 16 to 60.
That was reduced 25 or so years ago to 30 years which is what I imagine you say you
have exceeded. The quid pro quo for that was that your contributions if you went
over 30 years would not earn you any more.
That has now been increased to 35 years for the new State pension, but that pension
is significantly higher than the old one to compensate.
If you started out thinking you'd have to contribute for 44 years but retired early
with fewer years, you should be grateful that you're now eligible to receive the
full State pension, not be annoyed about it. Many others had no choice.
Had I under contributed by the same number of years, I would of course face a
Plus, the pension will be taxed.
Only if your total income is over the tax free allowance which in 17/18 will be
£11,500. Your State pension will be well under that, so you could say it is not
taxed at all.
Besides, all of your contributions to your pension(s) would have been made tax free.