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NI pension, wife approaching pension age
9 Answers
We've been married 28 years, I am 66, wife 57. She has few NI contributions. She stayed home till our 3 kids went to Uni (1980 - 2000), then worked part-time. I was redundant/retired early, she retired soon after. I have full NI payment record.
Last year, at 65, I was granted single person NI pension plus about �45 p.w for wife as a "dependant". We do not qualify for other State benefits due to my company pension.
Questions -
1/ What will happen when she reaches age 60 - does my "dependant" allowance cease?
2/ At what point, if ever, do we qualify as "married" pensioners (keep seeing references to "married couple" NI pension)
Am trying to assess cost-effectiveness of top-up NI contributions to improve her pension when she is 60.
I assume that, when I die, she will receive EITHER full Widow's pension OR full single person State pension based on MY contributions.
Last year, at 65, I was granted single person NI pension plus about �45 p.w for wife as a "dependant". We do not qualify for other State benefits due to my company pension.
Questions -
1/ What will happen when she reaches age 60 - does my "dependant" allowance cease?
2/ At what point, if ever, do we qualify as "married" pensioners (keep seeing references to "married couple" NI pension)
Am trying to assess cost-effectiveness of top-up NI contributions to improve her pension when she is 60.
I assume that, when I die, she will receive EITHER full Widow's pension OR full single person State pension based on MY contributions.
Answers
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At the moment State Pension age is 60 for women and 65 for men. From 2010 to 201o the pension age for women will gradually increase to match the age for men. If you go here, http://www.thepensionservice.gov.uk/state-pens ion/age-calculator.asp it will work out yir wife's retirement age for you. Until then you will get the increase for her.
When she does reach pension age, she will get a pension in her own right, based on her contributions and yours.
When she does reach pension age, she will get a pension in her own right, based on her contributions and yours.
Hmm. Some inaccuracies in the above. She won't get a Basic State pension based on your contributions whilst you are around - just on her own contributions.
You do need to understand just how many years contributions she has. As well as the rules changing for women from 2010 so they have to work longer before reaching state pensionable age. One thing not promoted much in the Press (presumably because it is a positive thing a Government did) is that the number of years contributions required goes DOWN from 39 to 30 in 2010. You may well find she will accrue enough without making more voluntary payments in, once the years' credits for when children are around is taken into account.
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You do need to understand just how many years contributions she has. As well as the rules changing for women from 2010 so they have to work longer before reaching state pensionable age. One thing not promoted much in the Press (presumably because it is a positive thing a Government did) is that the number of years contributions required goes DOWN from 39 to 30 in 2010. You may well find she will accrue enough without making more voluntary payments in, once the years' credits for when children are around is taken into account.
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I appreciate all the responses, BUT unfortunately none fully addressed the two SPECIFIC questions - which were
1/ When she reaches 60, will my "dependant" allowance cease
(she will be 60 on 16th Jan 2011, so perhaps it should be rephrased, to read when she reaches age 61) and
2/ At what point, if any, do we qualify as a "married couple" (my pension appears to be a "single" pension plus "dependant" allowance for my wife.
also would like confirmation on the final assumption in original submission.
Note I am not asking for specific numbers, just general guidance/information which would also be of value to other readers
1/ When she reaches 60, will my "dependant" allowance cease
(she will be 60 on 16th Jan 2011, so perhaps it should be rephrased, to read when she reaches age 61) and
2/ At what point, if any, do we qualify as a "married couple" (my pension appears to be a "single" pension plus "dependant" allowance for my wife.
also would like confirmation on the final assumption in original submission.
Note I am not asking for specific numbers, just general guidance/information which would also be of value to other readers
There is no married couple's rate as such. If yir wife had not worked at all, she will get a pension based solely upon yir own contributions. That rate is the same as the increase on yir pension. You would get the same amount of money between yous but the difference will be your wife will receive a pension in her own right..
The icnrease in yir own pension will stop when yir wife reaches her pension age.
The icnrease in yir own pension will stop when yir wife reaches her pension age.
Thanks, Corbyloo, that makes it clearer.
All we now need to do is
1/ Get a pension forecast for her
2/ Do the calculation to assess cost v/s benefit of "buying back" 6 years, currently �420 for each year bought, max �2520 to pay,) She does not have full NI record, even with 6 years added)
GAIN - approx �10 p.w increase on her pension at current pension rate
Allowing for lost interest on this �2520, it would thus take around 6 years to "break even", assuming I was still alive (I will be 75 in 2017, the 6th year).
Are my calculations reasonably accurate?
All we now need to do is
1/ Get a pension forecast for her
2/ Do the calculation to assess cost v/s benefit of "buying back" 6 years, currently �420 for each year bought, max �2520 to pay,) She does not have full NI record, even with 6 years added)
GAIN - approx �10 p.w increase on her pension at current pension rate
Allowing for lost interest on this �2520, it would thus take around 6 years to "break even", assuming I was still alive (I will be 75 in 2017, the 6th year).
Are my calculations reasonably accurate?
You will be best to wait for the pension forecast (which you can do online) and see what it says. I say that because from 2010 the number of full years' contributions reduces to 30 for men and women and the way. The way that Home Responsibilities Protection (HRP) helps toward State Pension also changes in that year (HRP is awrded if you receive Child Benefit or Carer�s Allowance for a complete tax year ). It's a wee bit complicated but it does affect the way the State Pension is calculated.
At the moment, HRP years reduce the number of years contributions needed to get a full pension which is 39 for a woman and 44 for a man.
So say for example yir wife had ten years' worth of contributions and sixteen years of HRP
She needs 23 years to get the full pension (39-16 HRP years) but has only 10 so she�ll get 10/23 of the full pension or about 44%
From 2010 those HRP count as credits so then it�ll be 10 years contributions plus 16 HRP years credits which comes to 26 and as she needs only 30 to get the full amount it�s 26/30 or about 87%.
You may be pleasantly surprised when you get the forecast
At the moment, HRP years reduce the number of years contributions needed to get a full pension which is 39 for a woman and 44 for a man.
So say for example yir wife had ten years' worth of contributions and sixteen years of HRP
She needs 23 years to get the full pension (39-16 HRP years) but has only 10 so she�ll get 10/23 of the full pension or about 44%
From 2010 those HRP count as credits so then it�ll be 10 years contributions plus 16 HRP years credits which comes to 26 and as she needs only 30 to get the full amount it�s 26/30 or about 87%.
You may be pleasantly surprised when you get the forecast
Corbyloo, thanks again!
We await the site "authorisation" to access on-line forecast.
"Home Responsibility" years - we had 3 children between 1980 and 1985. As we recall it, Child allowance ceased when the youngest (still at school) became 17, in June 2002, so in "tax year" terms (i.e. excluding part years) she had Child Allowance from 1981 to 2002, = 21 years.
Wife worked from age 16 (1967) to a few months before birth of our first (Nov 1980, when she was 29), Her NI contribution record starts at 18, (i.e from 1968) so she has about 22 years actual contributions, plus one or two years more from a part-time job in the later years.
If I read you correctly, 22 working years plus 21 "Home responsibility" years totals 43 years NI credits (plus the part-time job later).
She will be 60 in Jan 2011. The changes start in in 2010, so (as you say) we may be pleasantly surprised - she may get full pension with no need for "buy-back" to top up. Await the actual forecast with interest!
I'm posting a second question (not directly related) would appreciate your thoughts on that, too - heading State Pension Dependant Allowance for wife.
Thanks again for your very helpful response.
.
We await the site "authorisation" to access on-line forecast.
"Home Responsibility" years - we had 3 children between 1980 and 1985. As we recall it, Child allowance ceased when the youngest (still at school) became 17, in June 2002, so in "tax year" terms (i.e. excluding part years) she had Child Allowance from 1981 to 2002, = 21 years.
Wife worked from age 16 (1967) to a few months before birth of our first (Nov 1980, when she was 29), Her NI contribution record starts at 18, (i.e from 1968) so she has about 22 years actual contributions, plus one or two years more from a part-time job in the later years.
If I read you correctly, 22 working years plus 21 "Home responsibility" years totals 43 years NI credits (plus the part-time job later).
She will be 60 in Jan 2011. The changes start in in 2010, so (as you say) we may be pleasantly surprised - she may get full pension with no need for "buy-back" to top up. Await the actual forecast with interest!
I'm posting a second question (not directly related) would appreciate your thoughts on that, too - heading State Pension Dependant Allowance for wife.
Thanks again for your very helpful response.
.
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