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Pension Calculation

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JJ109 | 13:13 Sat 11th Jan 2025 | Business & Finance
15 Answers

For 7 months I have been trying to get the Department for pensions to explain to  me why they have only allowed me 27/35 of the full pension when for years and years according to their own records I was entitled to 31/35. I have appealed but am being ignored!

I was in full time employment with a UK bank for 27 years, and presumably this is where they get the 27 years of National Insurance. Prior to working for the Bank I was 3 years at Leeds University, and before I started at University I worked for 5 months at a factory staightening springs, between finishing A levels and going to University. I also worked one of the Summer vacs at the same factory as a general dogsbody. I took a voluntary severance package from the Bank and was on job seekers allowance for 8 months before emigrating.

Do the years I spent at University give me 3 years towards pension entitlement and if not, does 5 months work in a tax year entitle me instead?

Many thanks for any help

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Have you checked your Ni record on the hmrc site. It'll  list every year and tell you the missing years.

JJ - If you have no other income or pension and less than £10,000 in savings you'll be eligible for Pension Credit, which will increase your pension to the full amount.

Don't think the 3 years at uni would be part of your qualifying years.

You'll see whether you got N I credits

I don't think university years count...you'll have credits for the A level years only  I'm sure

Question Author

That was where I found out that I was entitled to 31 years. I didn't bother checking the actual years, but yes. that seems a good idea to go back and check it.

Thankyou!

Question Author

Thanks - Brainiac - I am noy entitled to pension credit as I live abroad

For two tax years whilst at University I worked for 5 months, so even if University doesn't count, I would have thought that I was entitled to 29 years

I shall go back to the Government website to see which years are missing.

Thanks everyone

The other thing  is what you were paid at the factory.  If your pay was below the lower limit for NI you would not receive anything.  If you got paid above the lower limit but up to£x you would not pay contributions but would have received credits.

Assuming this was the same back in 'the day' you would need to know what those figures were.

They don't make it easy.

You do not get NI credits as a student unless you are unable to work because you are ill or caring for somebody.

To make a year where you only worked part of the time a “qualifying year”, generally speaking you must have earned at least 52 times the weekly “Lower Earnings Limit” (LEL). The weekly LEL for the 2024/25 tax year is £123. This means in this year a worker needs to have earned at least £6,396 to make it a qualifying year. You will have to find out what the LEL was in the year when you worked five months and compare it to your earnings for that year.
 

If the 5 months were spread over 2 tax years, and probably only a fairly low wage, you were unlikely to have paid enough NI contributions to qualify unfortunately.

Crossed posts with Newjudge.  

^ and with ubasses. We're all sayng the same thing, but only your year by year NI record will tell you/ You can also see your earnings each year on your HMRC account.

Question Author

Thanks everyone - if they had that I was only entitled to 27 years on their website, I would have understood, but they have been saying for many many years that I have 31 years of credits. I need to go back now and see which years have changed!

Thanks again!

Are you sure that what the DWP were telling you was not based on expecting you to work (and pay N.I) up until your normal retirement age - this is often how they express a persons expected pension, which may differ from the actual pension (for a whole host of possible reasons).

Yes, I wondered that too Hymie but then thought it wouldn't have been showing "for many many years " that jj109 has 31 years' credits- the figure would have started higher and gradually fallen as jj109 spent more years not paying NI (presumably he retired/moved abroad) at around age 50).

 

Question Author

You are right newmodarmy. I moved abroad/retired at age 47. Obviously, coming up to my state retirement age of 66 I was checking my expected state pension. It has always for years stated 31 years of credits even a few months before I applied for the pension.

Was your scheme contracted out for maybe 3 of those years?  It may be that for those claimimg overseas the treatemnt of these years is different. The guidance on the HMRC site regarding contracyed out  is confusing (saying some of your pension is already included in the guaranteed minimum penion). HMRC has changed the notes several times in the last year but it's still ambiguous IMO- I won't be fully convinced until I start to receive my state pension this summer.

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