Top up or not? NI contribs

Pedue

A while back I checked my NI contributions, and saw that ...

"If you have gaps in your insurance record, you may be able to make voluntary contributions to increase your pension."

just checked again. And it looks like I can indeed top-up (various figures quoted for various years - ranging from the lowest (£30) to the highest (£645).

Back when I checked this initially, I called to talk to someone about doing this (HMRC), and they basically told me that it wasn't worth it. I forget the reason!

Any advice/views greatly appreciated. Is it worth doing?

xylophone

You have a state pension forecast?

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

What exactly does it say?

squirrelpie

just checked again. And it looks like I can indeed top-up (various figures quoted for various years - ranging from the lowest (£30) to the highest (£645).

Back when I checked this initially, I called to talk to someone about doing this (HMRC), and they basically told me that it wasn't worth it. I forget the reason!

The devil is in the detail, so forgetting the reason isn't very helpful. You'll need to post the details of each individual year's NI, along with your state pension forecast, if you want us to duplicate the work of the HMRC person you spoke to.

Pedue

Many thanks for that link. It says:

Estimate based on your National Insurance record up to 5 April 2018
£140.05 a week
Forecast if you contribute until 5 April 2023
£164.14 a week
You can improve your forecast
You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is
£168.60 a week

So, seems like it wouldn't be worth it.

p00hsticks

Pedue wrote: »

Many thanks for that link. It says:

Estimate based on your National Insurance record up to 5 April 2018
£140.05 a week
Forecast if you contribute until 5 April 2023
£164.14 a week
You can improve your forecast
You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is
£168.60 a week

So, seems like it wouldn't be worth it.

Possibly paying a one-off £30 to get an extra £4.46 a week for life isn't worth it ?

In practise, which of those shortfall year(s) will enable you to obtain that extra will depend on the details.And paying off more than one may mean that you don;t need to work up to State Retirement Age if your circumstances change.

So a few more questions.

Q. Your forecast figure of £164.14 assumes that you will be working full time up until you reach State Retirement Age - is this your plan?

Q. How many years NI did your forecast say you already had ?

Q. Was a COPE figure mentioned at all ?


Q. What NI years are you short ?

xylophone

See

https://www.royallondon.com/media/good-with-your-money-guides/topping-up-your-state-pension/

Linton

To get definitive information on voluntary NI contributions and state pension you should talk to the future pensions centre rather than HMRC. HMRC may try to answer your questions but I dont think they have access to your specific details. The FPC are the experts and are very helpful.

Pedue

Q. Your forecast figure of £164.14 assumes that you will be working full time up until you reach State Retirement Age - is this your plan?

House husband. Periodic work.

Q. How many years NI did your forecast say you already had ?

32
years of full contributions

5
years to contribute before 5 April 2023

13
years when you did not contribute enough

Q. Was a COPE figure mentioned at all ?
Nope

Q. What NI years are you short ?

You can make up the shortfall

2017-18
Pay a voluntary contribution of £427.50 by 5 April 2024.
2016-17
Pay a voluntary contribution of £615 by 5 April 2023.
2015-16
Pay a voluntary contribution of £420 by 5 April 2023.
2013-14
Pay a voluntary contribution of £225 by 5 April 2023.
2012-13
Pay a voluntary contribution of £390 by 5 April 2023.
2011-12
Pay a voluntary contribution of £150 by 5 April 2023.
2010-11
Pay a voluntary contribution of £345 by 5 April 2023.
2009-10
Pay a voluntary contribution of £30 by 5 April 2023.
2008-09
Pay a voluntary contribution of £645 by 5 April 2023.
2007-08
Pay a voluntary contribution of £360 by 5 April 2023.

atush

Well paying the three lowest ones would be worth it, but you /(if you keep working) have 37 years contributions- isnt that enough for the full amt? Ie 32+5?

molerat

One check to be safe on the COPE question as it is not mentioned on the front page of the forecast and people do miss it, you have to click on a link. Does the forecast mention you being in a contracted out scheme, do you have a works pension ?


Looking at the numbers you must have a COPE amount. 32 years pre 2016 at the new rate would be £154.24 so you must be on an old scheme amount which means buying any pre 2016 years would not add to your pension. To get the full house you need the full 5 years going forward from 2018-19 (it is not full so is not showing yet, should show up any time now) to 2022-23 plus one back, 2016-17 or 2017-18. 2017-18 is a definite, £427.50 one off for £4.82 per week inflation linked for the rest of your life.

pip895

Isn't paying class 2 NI an option? are you self employed? Much cheaper option at only £153.40/annum.

I keep a little consultancy work going just to allow me to use this - I have three more years to fill - I am hoping I may make it before they finally close the loop hole!