Obtaining extra NI years due to COPE - years short

thefuzz

I am now 60 and took redundancy in 2016. I was in a company pension scheme and have 43 qualifying NI years but a number of these were contracted out therefore my state pension earned so far is £138 because of COPE, instead of the £155 maximum payout. My state pension will start in 2022. I therefore have 6 years left to accrue the 4 years missing, to take me up to the maximum payout of £155. You can purchase additional years - for 2016/2017 it will be about £750. Another option is to set up a small business and make NI contributions. I believe that as long as you are operating as a small business you could have a nil return for profit, or a very small amount, and opt to pay a voluntary class 2I NI contribution equivalent to £2.80 a week. Therefore for roughly £140 you could gain an additional NI year, which can be repeated for the missing 4 years.
Is the small business option correct ?

xylophone

https://www.gov.uk/government/consultations/consultation-on-abolishing-class-2-national-insurance-and-introducing-a-contributory-benefit-test-to-class-4-national-insurance-for-the-self-employed

Silvertabby

Class 2 contributions are being abolished in 2018 (I think) .

saver861

Silvertabby wrote: »

Class 2 contributions are being abolished in 2018 (I think) .

Yup. You only have 2017/18 to get the bargain basement self employed voluntary version.

After that it is the £750 per year. Still a good deal tho. You would get your money back within just over 3 years and thereafter have an extra £230 per year. However, if you pay tax on it then it will take over 4 years to get your money back.