Shortfall in National Insurance Contributions

Woggle

Have been having a sort out and came across two letters received in October and December 2004 to my wife and myself respectively.

It basically says that there was a shortfall in our National Insurance contributions for 2002-03 (whilst we were both at University although both doing a little bit of part time work).

The shortfall is a couple of hundred pounds each. Is this something we should be paying? Of course, if we do, I'll now have to ring to get a new quote.

Both having our own individual pensions (teachers pension and Local Government pension respectively) but not sure how this affects state pension.

rosysparkle

I had one of these letters a little while ago - they wanted £11 or so. I think there was a number to ring on the letter to get a forecasted pension with or without the additional payment.

You could try asking the DWP whether it will make a significant difference to your income in retirement: http://www.thepensionservice.gov.uk/atoz/atozdetailed/rpforecast.asp

Woggle

Thanks. Think that's what I'll do.

Maid_of_Kent_3

It is possibly a mistake. I got a letter (as did some of my work colleagues) to say that we have not paid for 2004/5 when in fact we were employed by a reputable company and our contributions has certainly been paid over. Even before we could send the proof to them that we were up to date, we received letters to say that following review we had paid!!

Cook_County

1. It has been widely reported that due to a computer error HMRC sent out incorrect letters to up to 700,000 people in late 2006!

2. The 2004 letters may no longer be relevant due to this years changes in the number of years required to get a State pension. I agree that you should get current forecasts, which you can also do online these days...

oldwiring

You may find this useful http://www.direct.gov.uk/MoneyTaxAndBenefits/PensionsAndRetirement/StatePension/StatePensionArticles/fs/en?CONTENT_ID=10014671&chk=o2zBUd

Basixally you must pay contributions for 90% of your working life, considered to commence at age16, to get a full pension. See also section of article about less than 25% qualifying years.

Cook_County

The information quoted may be incorrect. You will need to consider carefully the white paper proposals; although HMRCs warninh here is somewhat old it is still valid:

http://www.hmrc.gov.uk/nic/vc3-important.htm

Of course paying any NI may save you nothing at all; eg: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/11/cmian11.xml

oldwiring

ISTM that if the White Paper proposala become law then the OP will have more chance of obtaining a full contrivution record than hitherto, Would that bot make the making up of lost years even more a waste?

ManAtHome

General advice seems to be to hang on - you can backdate payments up to 6 years so plenty of time to see if it becomes law.

More generally, surely this is just removing the current top-up if your pension is less than £114 anyway..? So is it worthwhile paying basic years whether the law changes or not?