Paying Voluntary Class 3 NI Contributions

jem16

bigfer said:

Is there any risk that setting up a DD going forward and paying for future years would not result in an increase in SP? I seem to remember some posts suggesting they had paid extra but not received and improvement in their forecast. Thanks.

You said that her forecast states £157.93 - is this up to 5th April 2019? Did she pay any NI during tax year 2019/20?

Based on the £157.93 for the moment, each year that she contributes post 2016 will gain her £175.20/35 which is £5 approximately. Three years more would bring her up to £172.95. If she pays for a fourth year it will only increase her pension by £2.25, slightly less than half. So she won't get the full value of that 4th year and it will take longer to recoup the outlay.

The 3 years are definitely worth it but perhaps not the fourth. You should really speak to the Future Pension Centre before deciding whether or not to pay and you would need to ensure that payments are stopped when she reaches that maximum or she will be paying unnecessarily.

bigfer

many thanks for your assistance.
She has a COPE estimate of £64.45pw.
The £157.93 is based on NI record up to 5th April 2020. She retired june 2019, but had made sufficent contributions to the 19/20 tax year to get an additional years NI.
I shall try to contact the Future Pension Centre and clarify the fourth year voluntary contributions.