Buy a top up year or put in ISA?

supersara2001

Hello,

Apologies if this doesn't belong here.

I had a letter from HMRC about buying another pension year. I've read Martin's article on Pension Boosting. It's for 2007-2008.

My dilemma is that I am currently saving up to return to uni and retrain as a radiographer. This is a 3 year course and as I already have a degree (graduated in 2008 and changed my mind about careers already!) I won't be paying NI as it's a full time course with placements and a part-time job just isn't possible. I've estimated I'll need to save up £12,000 to replace student loans by Sept. 2011.

I was wondering whether anyone had any opinion to weigh in on whether it would be better to put the £405 for the pension credit in my ISA towards my uni course, or whether as I will be missing out on 3 years of employment I should get this extra year while I can afford to?

Sorry it's a long post!

Edit: I should add that I have been contributing to a pension with the company I work for over the last year also.

jem16

supersara2001 wrote: »

I was wondering whether anyone had any opinion to weigh in on whether it would be better to put the £405 for the pension credit in my ISA towards my uni course, or whether as I will be missing out on 3 years of employment I should get this extra year while I can afford to?

From 2010 you will only need 30 years of NI contributions to qualify for a full state pension. If you feel over your working life you should achieve this there should be no need to pay the extra year.

jamesd

Assuming that you are under 25 or so it seems like a bad idea for you to buy this year now. With only 30 years needed it's likely that you will achieve that during a normal working life. If not, current rules would let you buy extra years later in your life if that 30 years minimum will otherwise be missed.

Consumerist

supersara2001 wrote: »

Edit: I should add that I have been contributing to a pension with the company I work for over the last year also.

The only point I would add to the above advice, for information, is that the pension you have contributed to whilst currently working will still be available for transfer to another employer's pension scheme when you do return to work. Keep tabs on it so you know where to find it when you're ready.
.

supersara2001

Thank you all.

I am currently 22 and when I return to university I will be 24, so will be 27 upon graduation. Even if I decide to have children I should still accumulate enough by the time I'm 65 so I'll hold off and put the money in my ISA instead.

Thank you!