NI voluntary contributions

minimaddave

Hi all,

I’m trying to think ahead and start planning how my income will look when I’m retired (I’m 32), and have just checked my state pension forecast. My forecast is £164.35 p/w (full amount), but I was wondering what happens if I decide to retire early?

I have 7 years of full contributions (lots of years are not full as I was studying) and I have the option to top-up some of these years (e.g. 2006-2007: £79.50). Is this worth doing to ensure that I will receive the full pension at retirement age, even if I retire early?

Thanks in advance for your help.

Minimaddave

p00hsticks

You don't say how old you are, how many more years you need to reach the maximum amount and how many more years you intend working.

As you currently only have seven years, buying the cheap pre-2016 year(s) will add to your current NI record in terms of your pension, but would be unecessary if you already intend to work for at least the number of future years you need.

And if you retire early you will still have an option of buying any years you need to make up to the maximum amount nearer the time.

Dazed_and_confused

Paying £79.50 to gain an additional full year might be prudent but as p00hsticks rightly says you have given us insufficient information really.

If you are confident you will get to £164.35 with your expected working (and NI paying) life then it could equally be seen as a wasted £79.50.

minimaddave

Thanks for your replies, and sorry that I hadn't provided enough info! I'm 32 years old, with "36 years to contribute before 5 April 2054" and "9 years when I did not contribute enough". The forecast is based on me contributing another 29 years.

I'm not sure when I'm likely to retire - this depends on what happens in the next 20-30 years, but I'd hope to retire before I'm 60. As I understand it, I need to contribute another 29 years (so 2047, when I'll be 60)? I guess I was wondering whether buying a cheap year now might make it easier to retire before 60 in the future?

snowqueen555

I am considering the same thing, though I realistically only have one year I can pay. I have been shooting emails around on how to do this properly. The only page I can find tells you to send payment by BACs or Bank Transfer with a reference number, but it seems a little iffy. How exactly do you get a reference number? How do they allocate this to your NI?

https://www.gov.uk/pay-voluntary-class-3-national-insurance

suki1964

The reference number comes with the bill. My husband gets sent a bill automatically every three months to pay as he is self employed


To get a bill, you need to ring them

suki1964

minimaddave wrote: »

Thanks for your replies, and sorry that I hadn't provided enough info! I'm 32 years old, with "36 years to contribute before 5 April 2054" and "9 years when I did not contribute enough". The forecast is based on me contributing another 29 years.

I'm not sure when I'm likely to retire - this depends on what happens in the next 20-30 years, but I'd hope to retire before I'm 60. As I understand it, I need to contribute another 29 years (so 2047, when I'll be 60)? I guess I was wondering whether buying a cheap year now might make it easier to retire before 60 in the future?

It is worth paying the cheap years if you can because you really don't know what life has in store for you.

Im looking to pay five cheap years as I need 11 more years and Im already mid 50s and my health and that of my mothers is failing, I might not be able to make those 11 years

molerat

snowqueen555 wrote: »

I am considering the same thing, though I realistically only have one year I can pay. I have been shooting emails around on how to do this properly. The only page I can find tells you to send payment by BACs or Bank Transfer with a reference number, but it seems a little iffy. How exactly do you get a reference number? How do they allocate this to your NI?

https://www.gov.uk/pay-voluntary-class-3-national-insurance

You could use the old fashioned letter and cheque method.

Alexland

My wife recently topped up her 2006-07 tax year on the phone with a bank transfer. It didn't cost much and we get plenty of money back from the government each tax year from Lifetime ISAs and being tax efficient with salary sacrifice pension contributions to avoid higher rate tax, child benefit clawback, etc.

She is early 30s and wants to retire at the same time as me. I hope to retire in my late 50s when she will still be early 50s so circa 50 years of retirement certainly won't be cheap but we have already accumulated fairly large pensions and intend to continue contributing for the next 20 years.

My suggestion is to determine if you will realistically have big enough accessible pension and/or investment pots to retire young enough to have a NI shortfall against your state pension. If you won't have enough provision then buying extra NI contributions could be a waste as you will have to work those years anyway.

Alex

nigelbb

molerat wrote: »

You could use the old fashioned letter and cheque method.

This is exactly what I did when I purchased added years even then I had to chase it up by phone because even though they signed for the recorded delivery letter they didn't actually cash the cheque for another four weeks.

p00hsticks

snowqueen555 wrote: »

I am considering the same thing, though I realistically only have one year I can pay. I have been shooting emails around on how to do this properly. The only page I can find tells you to send payment by BACs or Bank Transfer with a reference number, but it seems a little iffy. How exactly do you get a reference number? How do they allocate this to your NI?

https://www.gov.uk/pay-voluntary-class-3-national-insurance

As others have said, you can write a letter with your NI number on saying what year(s) you are paying for and enclosing a cheque.

Or you can call them on the number in that link (0300 200 3500) and they'll give you an online reference to make a faster payment via your online banking.

Someone in a previous thread reckoned they had worked out how the reference is contructed (it uses the digits from your NI number and various other figures) but I can't locate it at present.