11938 Advice to pay UK pension contribution gaps before 6 April 2009

Yes I can confirm that the rules were changed a couple of years back and the new reduced contributions still deliver a full pension.

Even before the last nine months of collapsing interest rates and share prices, paying for gaps in your UK pension contribution record was one of the best investments you could ever make, for anyone within reasonable striking distance of pensionable age. Now, I suspect that there may be no better investment at all (unless you are optimistic or foolish enough to count those involving minute probabilities like becoming a lottery winner).

For those in a position to benefit, Marc's warning that you only have three weeks left to do this until the cost goes up by 50% must be a very valuable piece of advice indeed.

Hi Bosco

I'm certainly not looking for investment advice:smile:, but what do you consider to be "reasonable striking distance of pensionable age". ? 3- 5 years, 5-10 years or more?

No tricks, genuine question:smile:

Thanks.

Just had a look here......interesting and a bit of of worry too..........

[url=http://www.gad.gov.uk/Demography_Data/Population/2004/methodology/pensionage.asp]GAD - Government Actuary's Department[/url]

[quote=Ghianda;114004]Hi Bosco

I'm certainly not looking for investment advice:smile:, but what do you consider to be "reasonable striking distance of pensionable age". ? 3- 5 years, 5-10 years or more?

No tricks, genuine question:smile:

Thanks.[/quote]

The thought behind the phrase was that someone younger might have urgent things to do with any spare cash they might have, like investing in a business idea with potential for growth or in a house that they might actually need to live in, rather than in something that was irreversible (you can't draw your money out again) and wouldn't pay off for decades and only then if they lived that long. By which time who knows what a pension will be worth anyway.

Whereas someone who is fairly near to retirement can work out on current figures how soon it will be before their investment is likely to be in profit, if they survive that long.

Nothing more profound than that, I'm afraid. So there's not an exact answer in years.

Not exact as you say Bosco, but well reasoned. Thanks.

Supplementary question if I am allowed one please... What happens to pension voluntary contributions if the contributor dies before reaching their pensionable age?

[quote=Ghianda;114028]Not exact as you say Bosco, but well reasoned. Thanks.

Supplementary question if I am allowed one please... What happens to pension voluntary contributions if the contributor dies before reaching their pensionable age?[/quote]

Exactly the same as happens to involuntary contributions, i.e. the contributions normally no longer exist as a separate refundable entity, but simply serve to increase your pension entitlement.

If you are single your pension entitlement dies with you. For others, in certain circumstances a surviving widow, widower or civil partner may become entitled to receive a pension based on their deceased partner's contribution record.

My mother paid contributions from when she started working. Unfortunately she passed away just five days before her 60th birthday. Her estate received nothing - just a request for a copy of ther death certificate!

Transfered my post to follow Marc's Thread. Sorry I missed yours Marc!

It can all be done by telephone from Italy...no forms. Apparently to get a full Pension, being female, (bit different for men), I had to have made 38 years contribution (not 30) but I could actually only make back payment for the years I was early retired from 2003-4 tax year until I was actually 60. Like many women my age I had paid a "married woman's stamp" in the dark ages. Don't let all this confuse you. Make a phone call and find out for yourself if you are around 60 and female.
This is what I posted in the wrong place!!

Before April 6 Invest & Increase UK State Pension

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To help a bit with living costs in Italy, did you know that if you apply by telephone before April 6th, you can increase the amount of your weekly state pension by making a one-off payment to HMRC? After this date rules change and it will cost a lot more to do so. So if like me you are female and have an English State Pension, it's likely that you aren't getting a FULL one. It is also likely that your savings in England are earning low interest.

I spent time today ringing various (0) 845 numbers (starting with (0) 845 3021479) and some very helpful people sorted me out. Basically if I have money sitting in the bank at 1.5% interest, I could instead, get an extra £500 a year for life, by making a back payment now. One way of looking at it was that the money I was sending to HMRC was giving me a 30% return...I am going to live to be very old!! Perhaps others would like to check this out? The question I asked was How much would I have to pay to top up my Pension? I found out which years I had to pay and how much I had to pay. A cheque for the total was to be sent to HMRC before 6 April. For me it was worth it.

A useful post. Earlier in the year I got a buff letter from the UK and thought, uh-oh..., but it was actually a standard letter on making top-ups, with a standard statement on what was needed, and then what years I had. Surprisingly I have enough, so no need for finding funds...

If you haven't received such a letter it's worth making enquiries.

I agree with others that if you think it may apply/be of benefit to you look into it straightaway either by phoning HRMC or by getting an online forecast - pretty straightforward to do.

My wife received a letter some years ago saying she had contribution shortfalls for a number of years. The amounts were listed and she could make them up by paying them before 6th April 2009. We decided to wait until nearer the date before doing anything - there's no point in paying early - and since then the rules have changed of course. As well as the reduction in number of Qualifying Years to 30 which is a big, big plus, there is another potential benefit in that now, years spent caring /bringing up children up to the age of 12 now count as full Qualifying Years (instead of 50% before - up to the age of 16). These two factors combined mean that my wife now has no, or only a negligible shortfall. We are checking the figures with HMRC at the moment.

My point is, check with HMRC first, because if you overpay ( as we would have done if we had resonded promptly to their letter) you dont get overpayments back!