I am hoping that someone who understands better than me how the state pension is calculated, might help me with a question. The department can only provide me with a statement of pension contributions and not discuss my individual query until I make a pension application. But as I seem to be on a cusp – unsure of what category I fall into - perhaps someone could advise.
I started work in November 1978 and I will reach the pension age of 66, six weeks into 2025. I have never not worked but for some years in the 1980s I worked for a rural County Council and my contributions for these years are class D1 and don’t count towards the state pension. I took a two-year unpaid career break to learn a trade and have been a small sole trader since then, paying 52 S stamps every year since 1988.
My current statement up to 2022 shows that I have 1,804 stamps. I have already done my tax returns as a sole trader tax for 2023. This bring it up to 1,856, although the statement does not as yet reflect this. If I make my 2024 tax returns in Jan of 2025 (just before my 66th birthday), I will have paid 1,908 stamps. However, I suspect that my these will not count as I will not have yet paid them when I need to apply some months in advance for my pension.
The Yearly Average Method states that if you have between 40 and 47 average contributions, you get a pension of €271.90. But if you have between 30 and 39 yearly stamps, you get €249.30 – a weekly difference of €22.60.
My question is this. If I use the Yearly Average Method and take 1978 as my start year, do I take 2024 (as the last full tax year before I reach pension age) or 2025 (as the tax year in which I reach pension age) as the year to count back from?
If it is 2024, it gives me an average of 39.48 contributions (1,856 divided by 47). If 2025 counts, it still only gives me an average of 39.75 (1,908 divided by 48).
Is it just my tough luck that I below the 40 contributions mark? Or, with this new option of delaying taking my pension for a year or two, would somebody with a sharper actuarial mind than mine, know if it is worth my while to delay taking my pension for a year or two until I reach the 40 annual contributions mark. Thanks for any advice.
I started work in November 1978 and I will reach the pension age of 66, six weeks into 2025. I have never not worked but for some years in the 1980s I worked for a rural County Council and my contributions for these years are class D1 and don’t count towards the state pension. I took a two-year unpaid career break to learn a trade and have been a small sole trader since then, paying 52 S stamps every year since 1988.
My current statement up to 2022 shows that I have 1,804 stamps. I have already done my tax returns as a sole trader tax for 2023. This bring it up to 1,856, although the statement does not as yet reflect this. If I make my 2024 tax returns in Jan of 2025 (just before my 66th birthday), I will have paid 1,908 stamps. However, I suspect that my these will not count as I will not have yet paid them when I need to apply some months in advance for my pension.
The Yearly Average Method states that if you have between 40 and 47 average contributions, you get a pension of €271.90. But if you have between 30 and 39 yearly stamps, you get €249.30 – a weekly difference of €22.60.
My question is this. If I use the Yearly Average Method and take 1978 as my start year, do I take 2024 (as the last full tax year before I reach pension age) or 2025 (as the tax year in which I reach pension age) as the year to count back from?
If it is 2024, it gives me an average of 39.48 contributions (1,856 divided by 47). If 2025 counts, it still only gives me an average of 39.75 (1,908 divided by 48).
Is it just my tough luck that I below the 40 contributions mark? Or, with this new option of delaying taking my pension for a year or two, would somebody with a sharper actuarial mind than mine, know if it is worth my while to delay taking my pension for a year or two until I reach the 40 annual contributions mark. Thanks for any advice.