How do I make voluntary National Insurance Contributions?

hugheskevi

Could you better explain why it would be a waste so I can tell her.

Based on the system being introduced from April 6th 2016, ie, the one you will retire under (subject to future change) and the 2016/17 rates...

• If you have 0-9 qualifying years, you will get nothing
• If you have 10 qualifying years you will get 10/35 of the full £155.65 rate, so a weekly pension of £44.47
• If you have 11-34 (inclusive) qualifying years, you get a pro-rata amount of the full rate
• If you have 35 qualifying years you get the full rate of £155.65
• If yo have 36+ qualifying years you get the full rate of £155.65

You will be able to have over 50 qualifying years potentially, but any over 35 are worthless, as you get the same pension.

You say you are 32 and missing a couple of years, so you probably already have something like 14 qualifying years (you got the first 3 tax years automatically, when you were 16, 17 and 18). You are therefore likely to get to 35 qualifying years when you are 50-55. [noting that due to the change to the new system it isn't quite as simple as this, but won't be too different]

If you are still working when you reach 35 qualifying years, the voluntary NI contributions will have been wasted. If you have retired early, gone abroad, or for whatever reason not got 35 qualifying years the purchase is likely to be a good decision.

I think I said that already to her but she said 'yes but you never know when the rules are going to change'.

Indeed. Making voluntary contributions may be the right decision, it probably won't be, but you never know. It is a bit like buying a lottery ticket - a bad financial action, but it might prove to be the right thing to do.

but think that was what she was arguing that it is best to qualify for the basic one asap to get on the ladder.

Getting 10 qualifying years makes no difference whatsoever to you until you reach State Pension age.

It is rather inconsistent to argue for urgency to make contributions as the system may change in future, but then to use as a justification a reference to a feature of the current pension system which has changed twice in the last decade or so

DigForVictory

Depending on how rickety mum is, get a couple of extra years to reassure her.

She may well have a touching faith in MSE but you only have one mum & while she may well be a nuisance, how many years do you need to reassure her?!

RickyB2000

I would agree, if they are cheap (say £200 or less) I would probably get them. As I said, I want to retire early and £200 now is a lot cheaper than £600 at say 57 if I was likely to have an incomplete record (or the government did something stupid like increased it back to 40 odd years and didn't pro-rata what had already been accrued). One other point, the government has generally protected that which people already have and 'punished' those who do not yet have. Based on this, historic accruals are more likely to be 'protected' than future accruals. No guarentees but a bird in the hand and all that......

If you are going to work to 68, that is 36 odd years extra so I would be much less worried.

greenglide

What you should do is to ensure that from now on each year from now on definitely does qualify so that this doesn't happen again? Much easier to pay the contributions when due (especially if self employer or not working) than creating more gaps.

cashmonger

greenglide wrote: »

What you should do is to ensure that from now on each year from now on definitely does qualify so that this doesn't happen again? Much easier to pay the contributions when due (especially if self employer or not working) than creating more gaps.

I have been paid automatically for the last few years due to low earnings but I got a letter the other day saying that will stop soon.

Not that I planned to be low earning all that time just I didn't have success in my business as I would have liked.

cashmonger

Sleazy wrote: »

Try this form

https://www.gov.uk/government/publications/national-insurance-application-to-pay-voluntary-national-insurance-contributions-ca5603

This form only lets you pay by direct debit monthly/quarterly and it seems indefinitely.

All I want to do is make one lump payment for the couple of hundred I am missing and forget about it yet this form seems to have no fields related to the gaps. So I don't know how they'd know what to take?

I can't see how I am supposed to only pay for the gaps?