NI Voluntary Contributions

KerryGold

Hi all,

I need some help planning for my old age!

I'm currently 28 and do not have a pension. I am saving regularly into an ISA though so I'm doing something. Hopefully by the end of the year I will have a job that comes with a company pension and I plan to begin my personal pension with them then. I am currently working for an agency and so have no provision.

My question is to do with paying back NI contributions.

I was a student from 1996 to 1999 and from 2000 to 2005 (total 8 years) and about 18 months ago I received a letter saying I would not have sufficient contributions - I think they reckoned I owed two years contributions to make up to the full basic state pension.

I'm female and married and while children are not an immediate concern they are in my thoughts regarding this. I had not planned to pay the money back - I planned to pay the equivalent amount into a private/company pension when I get one.

But I read an article this weekend in the paper saying that for £7.55 p.w. you would be MUCH better off paying the stamp than saving into a pension.

THEN I read that women will only need 30 NI years paying instead of previously 39. This means that if I previously was predicted to have 37 years then now I don't owe any as I have seven to play with (allowing a career break if I wanted).

Do I have this right? What should I do?
Thanks!

CIS

It wouldnt just be women needing 30yrs, its proposed (not yet finalsied) that anyone retiring on or after 6/4/2010 will need only 30 yrs.

The problem is , have you time to hang on and not pay these backdated conts ?, you have 6 yrs from the end of the tax year in which they are due to pay - if any of these are coming up to the deadline soon, you need to make a descision -pay and potentially lose out if the law changes or dont pay and if the law doesnt change you've los the right to pay.

If you can hang on with them , its probbaly best to wait and see which way the law will go.

You've also got the other side of the coin , and a lot of people aren't thinking of this, you see 30yrs as the target and thats the figure you want - but if you only have 30yrs to go and your trying to get 30yrs for a pension - you have no leeway - sometimes its best to ensure you have a couple of years leeway in what you've paid as onece you lose the chance to pay , its gone for good.