State Pension - when should I stop paying voluntary class 3 contributions?

richard6868

I retired on my occupational pensions in November 2014 and am due to receive the state pension on 6 September 2020.

As I was contracted out for almost all of my working life, I have been paying voluntary class 3 contributions since April 2015 (when the new pension arrangements came in) to increase the state pension I will eventually receive.

My GOV.UK state pension forecast predicts that my contributions up to 5 May 2018 would entitle me to £136.61 a week but that I will receive £146 per week if I continue my voluntary class 3 contributions until 5 April 2020. It then states that "£146 is the most you can get" which sounds very dogmatic.

Am I to take it that any voluntary class 3 contributions I make at the tail end after 5 April 2020 until I receive my pension on 6 September 2020 would derive absolutely no benefit in terms of additional pension - a waste of my money - and would I be wise to stop paying them on 5 April 2020?

[I have been unable to find an answer to this question of whether only a complete year's contributions count towards a pension increase anywhere on the Web.]

Marcon

There's nothing dogmatic about a simple statement of fact. You can't increase your state pension beyond £146 pw at today's rates, so why would you pay more after 5 April 2020?

molerat

Only full years count as well as anything paid in the financial year you reach state retirement does not count. New scheme April 2015 ??

xylophone

The new state pension started 6/4/16.

DairyQueen

richard6868 wrote: »

I retired on my occupational pensions in November 2014 and am due to receive the state pension on 6 September 2020.

As I was contracted out for almost all of my working life, I have been paying voluntary class 3 contributions since April 2015 (when the new pension arrangements came in) to increase the state pension I will eventually receive.

There's the clue. Most people who contracted-out are better off than those who didn't. The opportunity to add to your state pension is an extra cherry on the cake. The new SP rules began in April 2016 btw.

richard6868 wrote: »

My GOV.UK state pension forecast predicts that my contributions up to 5 May 2018 would entitle me to £136.61 a week but that I will receive £146 per week if I continue my voluntary class 3 contributions until 5 April 2020. It then states that "£146 is the most you can get" which sounds very dogmatic.

Not at all dogmatic. An individual's maximum is a product of the universal max minus current entitlement, divided by number of tax years remaining before the tax year in which you reach SP age. You are therefore able to top-up for two more tax years.

richard6868 wrote: »

Am I to take it that any voluntary class 3 contributions I make at the tail end after 5 April 2020 until I receive my pension on 6 September 2020 would derive absolutely no benefit in terms of additional pension - a waste of my money - and would I be wise to stop paying them on 5 April 2020?

Yes and yes. NI payments made in the tax year in which you reach SP age don't count.

richard6868

Yes, my mistake with the start date of the new pension arrangements.

GunJack

The only other possibility to increase your max SP may be to buy any pre-2016 missing years, but I suspect that is a very, very, very remote possibility.....might be worth checking your NI record whilst logged into gov.uk, there's a link to it from the SP Forecast page.....from the info given above, 2014/15 may be a candidate for this.