Pay voluntary NI contributions!?

vigman

Linton wrote: »

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.

Thank you so much for the information.

So my best bet is to pay the voluntary contributions for 16/17 and get the 1 year credit for the 17/18 year due because my 65th birthday is August 2018 (born 1953)?

TIA

Vigman

Tom99

[FONT=Verdana, sans-serif]It sounds to me as if the only year you can top missing NI is 2016/2017 which will give you an extra £4.56 a week. You will then get a credit for 2017/18 and another £4.56 a week making a total of £132.97.[/FONT]
[FONT=Verdana, sans-serif]I think 2016/2017 is £733.20 and you can send a cheque. Make sure you specify which years NI you are paying for.[/FONT]

xylophone

Yes it does. £65 per week.

Then at 6.4.16, the new rules calculation would have been £155.60 minus £65 which would have given you a starting amount of under £100 a week.

Therefore your starting amount was based on the old rules which means that only post 6 4 2016 contributions/credits will increase your state pension.

vigman

xylophone wrote: »

Then at 6.4.16, the new rules calculation would have been £155.60 minus £65 which would have given you a starting amount of under £100 a week.

Therefore your starting amount was based on the old rules which means that only post 6 4 2016 contributions/credits will increase your state pension.

I wonder why there is still the option to pay the years from 2012....?;)

Also I see that I can pay 16/17 up to 5th April 2023!? If I claim from Aug 2018 when I am 65, would they make up the missing £4.56 per week then in backpayment if paid in 2023?

I see the phone number on the pension forecast page is a 12p per minute line. Is there an 0800 for this? (I see there is if you are actually claiming or about to make a claim)

Vigman

xylophone

Have you looked at the links in my posts 2 and 8?

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

vigman

xylophone wrote: »

Have you looked at the links in my posts 2 and 8?

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

Thanks Xylophone that really is very clear.

Before today I had no idea about old and new rates.......COPE......or getting one year's free contributions as I was born in August 1953!

Excellent site and MSE advice as always!!

Vigman

SeeMe

I need to buy 4 more years for a full pension having been contracted out for a large part.
I am going to pay for 2 after this tax year, years 16/17 17/18, could i also pay in advance for the other 2, 18/19 19/20 at the current price in case the cost goes up?

OldBeanz

SeeMe wrote: »

I need to buy 4 more years for a full pension having been contracted out for a large part.
I am going to pay for 2 after this tax year, years 16/17 17/18, could i also pay in advance for the other 2, 18/19 19/20 at the current price in case the cost goes up?

There will be an expert along later, but from what I understand there is no benefit in buying until Apr 19 as the price will not change until then. I believe you cannot buy in advance either.

newatc

We spoke to DWP recently about adding NHI years for my wife. The first person we spoke to was useless and new less than me. We phoned back and this person said she would arrange for a NHI contribution expert to ring us as people had been given inappropriate advice so they had set up this new mechanism. A time was arranged in two weeks time and the expert duly phoned at that time.
He went through the options and recommended a course I had already decided on (but good to get the confirmation) but of course I would need to pursue the extra contributions with HMRC (started but will take them a month to send the forms!). The expert give us his name and advised us to get a new Pension Statement (a couple of months after purchase because it takes time!) ; he said he was 100% convinced his advice would achieve the desired result but said we could get back to him if that was not the case.

So it seems to me they are getting their act together and anyone not sure of what to do should call the DWP and make sure they speak to their Contribution expert.

SeeMe

OldBeanz wrote: »

There will be an expert along later, but from what I understand there is no benefit in buying until Apr 19 as the price will not change until then. I believe you cannot buy in advance either.

Ok thanks.
So the first 3 years i need will at least cost the same £733 per year 16/17 17/18 18/19, and will just have to pay the cost if it has risen for the final year i need 19/20.