Shortfall in National Insurance Contributions

Kess

jancee wrote: »

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.

In that case, since all the years they advised us had a shortfall were also covered by HRP (and marked as such in the letter), it does make you wonder why they bothered. I wonder how many people send in the money anyway...

Get a pension forecast.

We did, expecting it to itemise clearly the years for which we had paid enough NI, the years covered by HRP etc., and thus reveal exactly where any gaps were, but all it gave were grand totals and a couple of pages of explanatory notes. It didn't help much.

jancee_2

dougz wrote: »

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 The proposal to extend the Auto-Credits scheme to women has been rescinded.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/

Yes, that's the credits men have been getting from age 60-65 which are definitely being phased out as the women's pension age rises to 65. Juvenile credits still exist.

jancee_2

Kess wrote: »

We did, expecting it to itemise clearly the years for which we had paid enough NI, the years covered by HRP etc., and thus reveal exactly where any gaps were, but all it gave were grand totals and a couple of pages of explanatory notes. It didn't help much.

If no shortfalls were listed then none were available to pay. You can call the pension forecasting people and they will look at the calculation for you to see what years were used and which were covered by HRP.

Niggles

The latest Money Tips (18 March) says you can boost you state pension by £10,000s for £420 spend. Now I know voluntary contributions are a good deal but is it really that good? If I assume 1 extra year (£420) purchases approximately 3% increase in state pension (generous) then that equates to about £150 a year at present. If you take your pension for 30 years and inflation is a constant 5% then you could get over £11,000 extra, however if you put your £420 into a savings account for 30 years you might have accrued £1,800 or so. So to get to £10,000 net would be difficult, to get to £10,000s would be very difficult.
A figure of £5,000 seems more realistic, (still very good value) unless I my understanding is totally up the creek.

dweep

dougz wrote: »

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?

Anyone with any knowledge re dougz question. ?

Alternatively is it possible to send a blank cheque, asking them to put in the correct amount, ?? (with a covering letter stating the amount you've reckoned it up to be (but cannot be sure to the nearest penny, authorising them to complete the cheque. ??)

Actually re reading the above strikes me now as something that could lead to whole heap of misunderstandings, so i guess it wouldn't be permitted.

Lastly re NIC's for tax year 2008-2009, is there not a period of grace for making payment. I was hoping to pay mine in May of this year.
Some of my payments will be Class 3 conts and I was hoping I would be able to pay them in May at the old rate of £8 odd.

jancee_2

dweep wrote: »

Lastly re NIC's for tax year 2008-2009, is there not a period of grace for making payment. I was hoping to pay mine in May of this year.
Some of my payments will be Class 3 conts and I was hoping I would be able to pay them in May at the old rate of £8 odd.

Yes - the price is fixed for two years after the tax year in question.

weaver_4

I've taken a mid-career break and I've got the last three years of missing N.I. contributions to consider paying voluntary contributions for. I heard about the 49% price increase on the news so I though I'd better do some research quickly to avoid the price rise if possible.

According to the paperwork I've received I will need to pay £392.60 for the tax year 2006/2007. The amount to pay is fixed until 5 April 2009, but the payment can be delayed until 5 April 2013. The amount may change if paid more than two years after the end of the tax year (i.e. later than 5 April 2009).

My question is:-
If I pay after 5 April 2009 will the amount go up by 49%?

I was planning to leave the payment until just before 5 April 2013 and I assumed that the price increase would be reasonably small but if it's going up by 49% then I might be better off paying it now.

2nd question
I've also got missing contributions for the tax years 2007/2008 and 2008/2009 but I assume I can forget about these until 2010 and 2011. The two year grace period should cover me until then and protect me from the 49% price increase. Is this correct?

dougz_2

jancee wrote: »

HMRC is obliged to send out deficiency notes so that people can't say they were unaware.

What if you do not actually receive such a personal deficiency note for any particular year(s)? i.e undelivered because they got your address wrong, etc. Perhaps could this give you an extended period for payment at original rate, similar to the 1996-2002 situation?

jancee_2

dougz wrote: »

What if you do not actually receive such a personal deficiency note for any particular year(s)? i.e undelivered because they got your address wrong, etc. Perhaps could this give you an extended period for payment at original rate, similar to the 1996-2002 situation?

HMRC has discharged its duty by sending a deficiency notice to the address on file. If that has changed then it was up to the person in question to tell them that.

joedog

I have received a state pension forecast which shows that I have 24 out of the 30 qualifying years (mixture of HRP and NI - 2 children - youngest is 8). I have one missed year (1998) which I have a last chance to pay before 5th April - for £243.

I am 42. I know that I only have to earn 6 more qualifying years to reach the 30 but am not sure what to do. I phoned the Pension Advisory Service and they said you only have to work for 6 more years before retirement age. I know that doesn't sound much but I worry that if I lose my job in the future, I may not work for 6 more years. Buying missed years in the future will cost a lot I guess - more that the £243 I am being asked for now.

Does anyone know if you can get any other independent advice or do you know if the Pension Service offer guidance?

Would appreciate any advice on this matter.