New State Pension Guide

SeeMe

BoxerfanUK wrote: »

It would take you 3.11 years to get your money back so worth it in my opinion, although consider if you have other pension income your state pension may be taxable and in that case it would take up to 3.89 years to get your money back if a 20% taxpayer.

It would take 3.11 years for one year at £780 to get your money back, if you pay for 3 years, although the cost each year will rise slightly, will it still take around 3.11 to get your money back, does it work that way?

Broseley

Thanks everyone for the advice. Tom99 I did not reach retirement age in 2018 I retired early aged 59 at the end of April 2018. I phoned the Future Pension Helpline on .gov.uk and was told the figures I've quoted. I should not need to pay for 2017/18 or earlier as I was employed full time. Who do I phone to find out what years I can pay for?

molerat

Broseley wrote: »

Thanks everyone for the advice. Tom99 I did not reach retirement age in 2018 I retired early aged 59 at the end of April 2018. I phoned the Future Pension Helpline on .gov.uk and was told the figures I've quoted. I should not need to pay for 2017/18 or earlier as I was employed full time. Who do I phone to find out what years I can pay for?

https://www.gov.uk/pay-voluntary-class-3-national-insurance
You can set up a direct debit to pay from 2020 onwards.
You will need to pay 2018/19 and likely 2019/20 as a lump sum.
2018/19 will need to be paid by 5 April 2021 to get it at the 2018/19 price, after then it increases to the price for the year you pay it in.
You can not contribute for the financial year you reach state pension age - well, you can but it won't count.
If you currently have £143 then you need 5 whole years, the sixth will only get you around £1.30 for a full year contribution.
When do you reach retirement age ?

molerat

SeeMe wrote: »

It would take 3.11 years for one year at £780 to get your money back, if you pay for 3 years, although the cost each year will rise slightly, will it still take around 3.11 to get your money back, does it work that way?

Pretty much. The actual time to return varies very slightly as the cost of contribution and amount of pension are increased by different indexes. The 3.11 years does not take the annual increase into account though so that figure is a simplistic calculation.

Silvertabby

“ It would take 3.11 years for one year at £780 to get your money back, if you pay for 3 years, although the cost each year will rise slightly, will it still take around 3.11 to get your money back, does it work that way?
Originally posted by SeeMe

molerat wrote: »

Pretty much. The actual time to return varies very slightly as the cost of contribution and amount of pension are increased by different indexes. The 3.11 years does not take the annual increase into account though so that figure is a simplistic calculation.

More like 4 years for a basic rate tax payer pensioner. Still a good deal though.

[Deleted User]

Question...

Given that it’s such a fantastic deal, should one buy back all the “gap” years permitted under the current rule as soon as possible?

And if I continue paying voluntary NI contributions using direct debit, will I be able to stop once I reach 35 “pensionable” years?

Tom99

Deleted_User wrote: »

Question...

Given that it’s such a fantastic deal, should one buy back all the “gap” years permitted under the current rule as soon as possible?

And if I continue paying voluntary NI contributions using direct debit, will I be able to stop once I reach 35 “pensionable” years?

You would only buy gap years if your future earnings are not likely to increase your SP to the max anyway.
Otherwise its good value to fill in gaps but only those which will add to your SP. If you have been contracted out prior to 2016/17 its quite possible paying for gaps pre 2016/17 would not add anything.
You need to look at your state pension forecast to try and work that out but very unhelpfully it does not give you a straight yes/no for each missing year.
If you are making voluntary contributions you can stop at any time.

nigelbb

Tom99 wrote: »

You would only buy gap years if your future earnings are not likely to increase your SP to the max anyway.
Otherwise its good value to fill in gaps but only those which will add to your SP. If you have been contracted out prior to 2016/17 its quite possible paying for gaps pre 2016/17 would not add anything.
You need to look at your state pension forecast to try and work that out but very unhelpfully it does not give you a straight yes/no for each missing year.
If you are making voluntary contributions you can stop at any time.

You need to speak to the Future Pensions Centre to determine exactly which years you should make voluntary contributions to maximise your pension. They are very helpful & will explain exactly which years it is worth buying & which will not increase your pension.

Broseley

Hi Molerat I reach retirement aged 66 (unless they increase it again) in 6 year's time so in 2025.

molerat

Broseley wrote: »

Hi Molerat I reach retirement aged 66 (unless they increase it again) in 6 year's time so in 2025.

Before or after April 6th, makes all the difference to what you can buy Have you got a full on line pension forecast ?