Shortfall in National Insurance Contributions

fbrj

venetiadarling wrote: »

Forecast & Shortfall. The Pension Service will now only send out the info by post - which can take 10 days - so if you need to top up before 9 April 2009, after which it will be more expensive - ACT NOW. Online takes ages as you need a pssword and ID - also sent by post.

My experience on-line was that I applied for the Gov gateway enrollment etc for my pension forecast on 9th March. My Gateway ID and pension activation code (2 separate letters) were both posted on 10th and I received them on Wedneday 11th - which I thought was a pretty good turnaround!

I was then able to access all the info I needed re forecast and options about making good any missing contributions.

I had spoken beforehand to the Pension Service about doing this by post and they mentioned the 10 days (referred to in the above post) and mentioned that these were business days...in other words 2 weeks! By now that would be cutting it quite fine....

dougz_2

jamesd wrote: »

The forecast tells you exactly how much you need to buy each of the individual years. You can choose any years you like and just add up the cost for each year to get the amount to put on the cheque.

Is there a form to include with such a cheque to tell them which specific years you have chosen to buy? I could not find anything like that on hmrc website.

Also, does anyone know, if you are certain that particular years are missing, and know the applicable rate, can you just send a cheque off without getting a forecast first?

jancee_2

dougz wrote: »

Is there a form to include with such a cheque to tell them which specific years you have chosen to buy? I could not find anything like that on hmrc website.

Also, does anyone know, if you are certain that particular years are missing, and know the applicable rate, can you just send a cheque off without getting a forecast first?

No form, you just write your NI number and the years you're paying for on the back of the cheque.

And yes, you can pay for years that you know about if you're confident that you've no other contributions in that year.

Pete2001

Just got through reading this thread - some interesting stuff. Just a couple of questions I have - wonder if anyone could help:

(1) It seems that under the new rules the autocredits given for ages 60-65 are being phased out, but what about the 'juvenile' credits between 16-18 are they being retained?

(2) I have to send a cheque to pay for some missing years by 5th April and since it seems there is a backlog will this have any effect on making the deadline - is it worth sending the cheque by recorded delivery?

(3) On the payment letter I have from 2005 it asks that cheques are made payable to 'Inland Revenue' but on the HMRC website it asks that NI deficiency payments are made out to ‘HM Revenue & Customs only’ - which is right? Does it matter?

Thanks in advance for any help.

Kess

My wife is really struggling to decide whether or not to pay voluntary NI contributions. :huh: The letter from the Inland Revenue is very vaguely worded, saying that extra contributions might "possibly improve" her pension and then adding that she might not need to pay for HRP years (in which case why are they requesting contributions for some of the HRP-covered years). The helpline wasn't much help either.

Can anyone answer the following: if we do pay voluntary contributions to make up the NI shortfall in a year covered by HRP, is that money wasted? Or does that buy her a "bonus" year in addition to the HRP year (hope that makes sense)?

Thanks.

dougz_2

Following on from Kess' question, what exactly does happen if you accidentally pay too much?

i.e Say you sent a cheque for the voluntary NIC for all 52 weeks of a past tax year, but it turns out you had already contributed for 3 weeks of that year. Would you get 3/52 of your cheque refunded, do you just lose it, or perhaps do they reject the whole payment as being an incorrect?

jancee_2

Pete2001 wrote: »

Just got through reading this thread - some interesting stuff. Just a couple of questions I have - wonder if anyone could help:

(1) It seems that under the new rules the autocredits given for ages 60-65 are being phased out, but what about the 'juvenile' credits between 16-18 are they being retained?

(2) I have to send a cheque to pay for some missing years by 5th April and since it seems there is a backlog will this have any effect on making the deadline - is it worth sending the cheque by recorded delivery?

(3) On the payment letter I have from 2005 it asks that cheques are made payable to 'Inland Revenue' but on the HMRC website it asks that NI deficiency payments are made out to ‘HM Revenue & Customs only’ - which is right? Does it matter?

Thanks in advance for any help.

1) No plans to phase them out at present.
2) I would, to be on the safe side
3) HM Revenue & Customs only - Inland Revenue might case a delay.

jancee_2

Kess wrote: »

My wife is really struggling to decide whether or not to pay voluntary NI contributions. :huh: The letter from the Inland Revenue is very vaguely worded, saying that extra contributions might "possibly improve" her pension and then adding that she might not need to pay for HRP years (in which case why are they requesting contributions for some of the HRP-covered years). The helpline wasn't much help either.

Can anyone answer the following: if we do pay voluntary contributions to make up the NI shortfall in a year covered by HRP, is that money wasted? Or does that buy her a "bonus" year in addition to the HRP year (hope that makes sense)?

Thanks.

HMRC is obliged to send out deficiency notes so that people can't say they were unaware. If you do pay for an HRP year that money is wasted. Get a pension forecast.

Unless your wife was entitled to pay the married woman's small stamp, she is covered by HRP for years which come under the following circumstances.

In receipt of Child Benefit at or after 6 April 1978 when the scheme began.
Not working or not earning enough to pay NI.
If beginning after Apr 78, HRP applies from the April after the eldest child's birth until the April BEFORE the youngest child's 16th. After 6 April 2010, the limit is the April before the youngest's 12th birthday.

jamesd

I think that there is a plan to phase out autocredits, so verify if you plan to rely on this.

dougz_2

jancee wrote: »

1) No plans to phase them out at present.

but this sounds like there is ...
These Auto-Credits for men will be phased out between April 2010 and April 2019 in accordance with the following table. The proposal to extend the Auto-Credits scheme to women has been rescinded.
http://www.pensionsadvisoryservice.org.uk/State_Pensions/Credits/