Is it worth paying voluntary contributions to make up old National Insurance years?

snowqueen555

Hi all,

Can't find a definitive answer on google at all! I currently have 10 years paid NI (so 25 years more needed for the full state pension), with 3 uncompleted years that I can make up the difference. Is it worth it? I am in my late 20's so have a lot of working years ahead of me.

One year I only need to pay £120, the others are around £400 and £500.

There is no definitive anser I can find online.

molerat

It all depends on what you are going to do for the next 40 years before you reach state retirement age. Currently you can get credits for being unemployed, receiving child benefit and with some benefits as well as through employment. Personally I think it is unlikely to be worth paying out for these.

DigForVictory

You have your eyes open to this - that's a good start. I share your feeling that you've decades of good life in you & that paying now is daft, but keep an eye open.

Time off for maternity need not kill your state pension NI record - even higher earners can opt not to be paid child benefit but still protect their state pension (section 4, box 68 I think), meanwhile just keep an eye open & stay mildly paranoid?!

colsten

I would complete my NI contributions if it didn't put undue financial constraint on me. NI pays for more than pensions - Job Seekers Allowance, Employment and Support Allowance, Maternity Leave are all dependent on NI contributions, and who knows what the eligibility criteria will be in the future, and what else will be subject to NI contributions. Some of the NI contribution money also goes towards funding the NHS, I believe.

You never know when you would need state support, and it would be terrible if you couldn't get it because you have missed the minimum qualifying years, and not very nice if you just get a minimum amount because you contributed a minimum amount.

If you think you can fund all your future needs yourself, fair enough.

molerat

Class 3s only add to the entitlement to state pension and bereavement benefits.
https://www.gov.uk/national-insurance/what-national-insurance-is-for

bigadaj

colsten wrote: »

I would complete my NI contributions if it didn't put undue financial constraint on me. NI pays for more than pensions - Job Seekers Allowance, Employment and Support Allowance, Maternity Leave are all dependent on NI contributions, and who knows what the eligibility criteria will be in the future, and what else will be subject to NI contributions. Some of the NI contribution money also goes towards funding the NHS, I believe.

You never know when you would need state support, and it would be terrible if you couldn't get it because you have missed the minimum qualifying years, and not very nice if you just get a minimum amount because you contributed a minimum amount.

If you think you can fund all your future needs yourself, fair enough.

Seem pretty poor advice to me.

State support in terms of contribution based Jobseeker's relies solely on the previous two years of contributions, you gain nothing by paying historic gaps.

NI theoretically pays for many things, but it is largely a tax that comes with certain benefits, I certainly wouldn't be voluntarily paying NI on the basis it was going to the NHS, better contributing to charity.

colsten

bigadaj wrote: »

State support in terms of contribution based Jobseeker's relies solely on the previous two years of contributions, you gain nothing by paying historic gaps.

that is true today. Will you guarantee it will be true tomorrow?

bigadaj wrote: »

NI theoretically pays for many things, but it is largely a tax that comes with certain benefits, I certainly wouldn't be voluntarily paying NI on the basis it was going to the NHS, better contributing to charity.

NI doesn't "theoretically pay for many things". It practically does. I am disturbed that people would want to avoid paying NI but still expect full routine and emergency medical treatment, full unemployment and sickness benefit payments, and full state pensions, but not contribute in full to it. But fair enough, please identify yourself to the DWP and to the NHS if you prefer to make your own provisions and don't wish to call on any of their services.

bigadaj

colsten wrote: »

that is true today. Will you guarantee it will be true tomorrow?

NI doesn't "theoretically pay for many things". It practically does. I am disturbed that people would want to avoid paying NI but still expect full routine and emergency medical treatment, full unemployment and sickness benefit payments, and full state pensions, but not contribute in full to it. But fair enough, please identify yourself to the DWP and to the NHS if you prefer to make your own provisions and don't wish to call on any of their services.

The number of years of NI contributions has been going up and down like the proverbial, just look at the waspi campaign and the fact that many younger people think there won't be a state pension in a few decades. It's not soemthing I'm absolutely counting on in two decades or so, though teh most recent changes would seem to indicate that it is unlikely to be withdrawn or means tested.

In fact presumably having paid all your NI, you'll be forming your own personal waspi campaign when your unnecessary contributions haven't got you what you thought you were entitled to?

The NI payment is basically theoretical, it is required to be paid like any other tax there's nothing voluntary about it. It goes into the general taxation pot, there is an NI fund, but teh liability for provision of funding still lies with the government.

I don't make the rules, entitlement to benefits and health care provision is defined by the relevant legislation, your opinions, like mine, are totally irrelevant in that context, you either qualify or you don't.

There is insufficient financial provision for the welfare and benefits system as evidenced by the huge national debt, you can vote for Jeremy corbyns fantasy world, but he hasn't got a hope in hell of getting elected, and so were likely to see more cuts, good and bad.

There has to be fundamental change to the NHS, it is an inefficient and ageing dinosaur providing poor value for money care, just go anywhere else in western Europe for comparison.

xylophone

Have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension

See http://www.thisismoney.co.uk/money/pensions/article-3535618/STEVE-WEBB-Buying-ups-paying-missing-NI-boost-state-pension.html

Dird

colsten wrote: »

I am disturbed that people would want to avoid paying NI but still expect full routine and emergency medical treatment, full unemployment and sickness benefit payments, and full state pensions, but not contribute in full to it. But fair enough, please identify yourself to the DWP and to the NHS if you prefer to make your own provisions and don't wish to call on any of their services.

People on JSA/disability benefits/mothers claiming CTC for 10 kids do the same

jamesd

snowqueen555 wrote: »

I currently have 10 years paid NI (so 25 years more needed for the full state pension), with 3 uncompleted years that I can make up the difference. Is it worth it? I am in my late 20's so have a lot of working years ahead of me.

It's unlikely to be worth it unless you think that you will spend a lot of time outside the UK and not paying into the National Insurance system. Seeking work in the UK and receiving benefits or receiving Child Benefit in your name would get you NI credits, as would payments to those who are unable to work due to disability. So those cases would greatly reduce the chance of you not getting to the maximum possible flat rate state pension level.

It's likely that you are about 40 years from state pension age. That's a long time to get the current 25 years extra needed. You probably also don't need 35 years total because some of your work was under the older system and that's more generous for people who are working.

I did buy many years a few years back when the total needed for a full basic state pension was 30 years, to take me to age 58 or so before I'd reach 30 total. That served me quite well when the number was raised to 35 years. If I'd just done the minimum I'd be unable now to get to 35 years. But you have so long to go compared to me that not buying seems better for you.

snowqueen555 wrote: »

One year I only need to pay £120, the others are around £400 and £500.

If you want to buy some safety margin in case you might work abroad or just not be getting NI or NI credits (house husband or wife with no children, say) then the £120 buy looks cheap enough. If you have high confidence that you'd be in this situation the £400 and £500 buys would also make sense because they are cheaper than buying years in the future are likely to be.