Pay voluntary NI contributions!?

vigman

Hi

I thought I had enough NI contributions to get a full state pension.
Gov.uk says:
Summary
40
years of full contributions

1
year to contribute before 5 April 2018

6
years when you did not contribute enough

I retired early on ill health grounds in 2012.

It says £128.41 at my 65th birthday if I contribute to April 2018

Estimated to April 2017 £123.85

However it says I could get £132.97 if I made up the shortfall.

Each years for 6 years that I can pay cost c £733 so if I pay £4398 it seems I could get c £10 gross per week (£520 pa) more if I paid the £4398

Am I right in thinking I would only benefit by paying the voluntary contributions if I live another 8 years?

Also if I just paid the £733 shortfall for 17/18 I would go from £123.98 to £128.41 so approx £5 per week or £260 pa and would only have to live 3 years more to benefit?

I'm totally confused.......

What would fellow MSE folk do please?

TIA

Vigman

xylophone

Each years for 6 years that I can pay cost c £733 so if I pay £4398 it seems I could get c £10 gross per week (£520 pa) more if I paid the £4398

See https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

Was your "starting amount" based on the old system?

If so, you can only top up by buying post 2016 years up to your SPA.

vigman

I'm even more confused that my wife who has a 40 year record but worked in more part time and lower paid jobs has a forecast of £155 per week from May 2020 when she will be 66?

Why can she get £20+ a week more than me....?

Vigman

Linton

Even though you have sufficient NI years you are probably not getting a full new State Pension because for some of those years you were contracted out of SERPS/S2P possibly because you have a DB pension. As this led to you paying reduced NI it was considered fair that your pension should be reduced to reflect this, but it wouldnt be reduced to less than you would have got under the old scheme.

This has the effect that anyone in your position who already contributed sufficient NI years would not benefit from paying missing pre 2016 years. You can only usefully make voluntary contributions for the tax years 2016/2017 and 2017/2018 (I assume your birthday is after April 5th). So "making up the shortfall" is a very bad deal for you.

As you have found each NI year after 5th April 2016 gives you £4.56/week which is an astonishingly good deal paying back after about 3 years when your life expectancy, if you were in good health, would be around 20 years.

redux

vigman wrote: »

I'm even more confused that my wife who has a 40 year record but worked in more part time and lower paid jobs has a forecast of £155 per week from May 2020 when she will be 66?

Why can she get £20+ a week more than me....?

Vigman

Were you for some of the time in an occupational scheme where you had contracted out of full NI payments, and the scheme invested this for you instead?

p00hsticks

vigman wrote: »

I'm even more confused that my wife who has a 40 year record but worked in more part time and lower paid jobs has a forecast of £155 per week from May 2020 when she will be 66?

Why can she get £20+ a week more than me....?

Vigman

At a guess, your wife was contracted in for most of her working life whereas you were contracted out (i.e. your employer provided a private pension for you and you therefore paid a lower rate of NI).

xylophone

Does your forecast show a COPE?

If so, how much was it?

xylophone

https://forums.moneysavingexpert.com/discussion/5756752

See post 17.

Tom99

[FONT=Verdana, sans-serif]If you are male and born before 6th Oct 1953 you should be entitled to 1 or more years NI credit.

[/FONT] [FONT=Verdana, sans-serif]Sounds like you are 65 at some point after April 2018 and if this is before 6th Oct 2018 you should get 1 yr credit or 2 yr credit if you are 65 before 6th July 2018.

[/FONT] [FONT=Verdana, sans-serif]https://www.gov.uk/automatic-pension-credits-for-men[/FONT]

vigman

Tom99 wrote: »

[FONT=Verdana, sans-serif]If you are male and born before 6th Oct 1953 you should be entitled to 1 or more years NI credit.

[/FONT] [FONT=Verdana, sans-serif]Sounds like you are 65 at some point after April 2018 and if this is before 6th Oct 2018 you should get 1 yr credit or 2 yr credit if you are 65 before 6th July 2018.

[/FONT] [FONT=Verdana, sans-serif]https://www.gov.uk/automatic-pension-credits-for-men[/FONT]

Many thanks for that. Yes it seems that I have a 1 year credit due.
As it has not yet been automatically applied do I take it this will be for the 17/18 year?

I need to know which years to top up now to get the extra £5 per week.

TIA

Vigman

vigman

xylophone wrote: »

Does your forecast show a COPE?

If so, how much was it?

Yes it does. £65 per week.

TIA

Vigman