NI Gap payment

[SIRandyraven]

I work full time and pay high rate tax.
Must admit I earn a very good salary.
My estimate (Done in 2009) for state pension is £160 at retirement age.

My wife works part time and earns minimum wage and works 18.5 hours per week.
Her state pension estimate on retirement (Done in 2009) is £109 a week.

However we have had two letters in the last two years saying she has a NI payment gap. They have offered us the opportunity to make up the short fall, by paying £114 and £48.
We have until 2015 and 2017 to make the payments.

Am I correct in thinking with the proposed minimum state pension proposal of £140 per week, is it worth making up the short fall ?

Guess if this does come in ...I will be out of pocket and she will be in pocket.

(I also have a three private pensions from different employers).

Comments on if you agree and I should wait ?

[EDDIE51]

Look here , your wife needs 30 years contributions for a full pension.
http://www.direct.gov...ndtoppingup/DG_190077

[factor-fiction]

I assume you had paid something into SERPS or the various other state additional pensions. I'm not sure whether existing SERPS benefits will be preserved. You'll neeed to find the proposals but things will be clearer once the plans are finalised.
I am not sure but I think that to get the proposed £140 universal pension you still need to make the required NI contributions. I'd wait and get another forecast nearer the time as things may change again

[EDDIE51]

Looking at this again is it not worth £114 + £48 = £162 to ensure your wife has a full pension ? Would you really miss £162 to ensure a full pension for your wife ??
I would definately pay it unless I looked at the link I gave and saw it was not nessesary.

[boxtops]

I'd certainly pay it - it's hardly a great deal of money to make up for a lifetime pension.

[SIRandyraven]

I have no issue with paying the money.
Very little I know.

But my point was , why pay the money and then in a few months the government announce that the minimum state pension is £140 regardless of how many years contribution you have made.
ie Not the full 30 years.

I understood the £140 (maybe a bit more) minimum pension was for those who had been away from work for periods of time due to rearing children and being a carer ?

[SIRandyraven]

Still have until 2015 to see what happens :-)
I will research the £140 minimum pension proposal further and see what the qualification is for this.
ie You must have made the full 30 years contribution or not.

[buildersmate]

If all she has to pay is the small sums you mention, she must have worked in those 2 years but just fell short of the required minimum contribution.
It's a no-brainer - its worth doing if you have worked out that she will need those 2 years of contributions to reach the minimum 30 by the time she intends to stop working (note I said stop working - not necessarily retire).
There is no benefit in accruing more than 30 years worth of benefit - it gets her the full state pension.
You can't rely on what Governments will do in future - they have a habit of changing the rules.

[SIRandyraven]

Thanks for the help on this.
Spot on ...You do still need the 30 years to get the minimum £140 !
She has 23 years accrued so far , thus I will pay the gap payment.

Just read this and it says the same about needing the 30 years.

@EDDIE50 / FACTOR30 - Spot on about the 30 years regardless.

http://www.saga.co.uk...n-reform.aspx#section 6

[SIRandyraven]

Wish I could mark more than one best answer.

This state pensions thing is a nightmare to understand.
No wonder the government wants to simplify it.

I find options swaps on bonds easier to understand than this lol

[boxtops]

sandy, is your wife past 60 yet?- if so, I hope she's no longer paying NI but has the exemption card?