When to buy additional post 16 years?

relishy57

Hi
First post but have been reading posts for some time. I know this has been discussed but I need some specific advice please.
Just need some advice on when to buy additional years? I have been contracted out and will reach SPA in 2023. Took early retirement from teaching 3 years ago and have worked 2.5 years part-time but not earned enough to pay NI contributions. This pattern will most likely continue.
My question (s) is will it be better to buy each additional year to top up new SP as each year ends or wait until the last possible date for each year? Am I correct in thinking that you can't buy say all 6 years that I am short of full amount just before pension age so keeping savings earning interest up to then?
Once purchased are these years 'safe' from any future changes as have had state pension age change from 60 to 65 and now 66 years and the amount of needed years change also.
Hope this is clear?

molerat

The cost stays at the in year price for 2 years after the end of the year concerned, after then it will cost the price of the year it is purchased in. You can purchase up to the previous 6 years. Once purchased it becomes a year but how many years you need is subject to the whims of government although the now seemingly accepted notice of change is 10 years.

Are you not earning enough to be credited with contributions - over £112 a week, £486 a month ? Have you got an up to date pension forecast ?

xylophone

Are you not earning enough to be credited with contributions - over £112 a week, £486 a month ? Have you got an up to date pension forecast ?

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

http://taxaid.org.uk/guides/information/an-introduction-to-income-tax-national-insurance-and-tax-credits/national-insurance/national-insurance-for-employees-and-employers/national-insurance-thresholds

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

relishy57

Thank you both for your replies, you are very knowledgeable. I have my pension forecast thank you and it is the contracted out years I am hoping to top up before pension age. This seems too good to not do!
I only work 3 mornings a week at a playgroup at minimum wage so don't make enough for National insurance contributions to apply. I do pay tax at the basic rate tax though. If circumstances change over the next 6 years I may earn more. I do have 36 pre 2016 years. I am hoping for some grandchildren before I am 66 so if still applicable may get some credits for doing childcare for them.
So to clarify for Year 16/17 I have until 2019 to buy that year and so on?
Will read links, thank you.

molerat

Yes, for 16/17 you have until 5 Apr 19 to purchase them at the current rate.

JezR

There is always a risk that leaving buying the contributions at the last minute could also fall foul of some regulation or legal change made in the meantime. Politicians seem to wish to tinker with state pensions all the time these days. Unlikely this may change perhaps, but it would be politically a lot more difficult to renege on contributions already made than stop them being made in the future.

relishy57

Sound advice re not waiting. Unfortunately it is a volatile area with no guarantees as we have seen in recent years.

JezR

Of course it cuts both ways - some who bought extra years when the required contribution for a man for a full basic state pension was 44 years wasted their money.

relishy57

Just reviving this thread as just been onto my pension forecast. 2016/17 years records are not available yet? I know I haven't paid any NI due to low earnings so when should I expect to see it updated?

molerat

If there is no contribution record it may not update until October.

sleepless_saver

relishy57 wrote: »

I only work 3 mornings a week at a playgroup at minimum wage so don't make enough for National insurance contributions to apply. I do pay tax at the basic rate tax though.

I know it's not what you asked, but at those earnings you should be paying no income tax, not basic rate. Current personal tax allowance is £11500 and you must be well below that. You can claim back up to 4 years overpaid tax from HMRC.