When should I stop paying voluntary class 3 NICs

muckboot

On taking early retirement I had 37 complete years of NICs but starting with the year the NSP was introduced I have been making voluntary class 3 NICs to increase the pension I was forecast to receive.

My pension becomes payable on 29th March 2023
Am I correct in thinking that contributing after 2021-2022 would be pointless because for the year 2022-2023 I would not be allowed to contribute for the period 29th March 2023 to 5th April 2023 making the contributions for the 2022 -2023 year incomplete and not eligible to be counted.

I would really appreciate some confirmation that I have understood the rules correctly.

Thanks in anticipation

Dazed_and_C0nfused

Without knowing what your State Pension forecast shows its impossible to know for certain.  The full forecast, not the likely headline of £175.20.

You may already be paying unnecessarily but equally could be best off paying upto and including the 2021:22 tax year.

Paying for 2022:23 is pointless as you cannot gain a qualifying year in the tax year you reach State Pension age.

Have you considered starring a small business and paying voluntary Class 2 National Insurance rather than Class 3?  Would save you c£1,200 over this year (2020:21) and next (2021:22).

muckboot

Thanks  Dazed_and_COnfused.
It would appear I'm doing the right thing making these contributions because the pension starting amount based on my National Insurance record on 5th April 2015 was £120.95 a week rising to £149.40 if I continued to contribute. 
I have made contributions since 2016 and my latest projection if I continue contributing to 5th April 2022 is £166.17.

Having a birthday so close to the end of the financial year made me want to be absolutely sure I couldn't contribute any more so your answer has clarified this for me.

Your idea of starting a small business is not for me I'm afraid but the NICs savings you outline will certainly be of interest to anyone that way inclined.
Thanks again for the information

balbs

A small business can be anything - just sell the odd item on ebay and you are a small business and businesses are not forced to make a profit - not much paperwork and you save considerable amounts on NIC's.  The government had proposals to abolish class 2 contributions (overtaken by events) so take advantage while you can.

bigfer

i am sure this has already been asked, but is there an idiots guide to establishing a small business that will be eligible to make class 2 contributions? Can an individual do this even if in receiving a private pension? Are there any significant drawbacks to this?
Sorry if going over old ground, but if this legitimate and easy i would be interested in exploring it.

Dazed_and_C0nfused

No reason I can think of but some people would probably see having to complete a Self Assessment return as a drawback.

What sort of business were you thinking of?

muckboot

Thanks balbs,
Having had a look I don't think paperwork involved in setting up a small business (sole trader) is quite as straight forward and simple as you make it sound.....or maybe it's me having a senior moment.
I will not discount the idea but it does seem rather complicated (to me anyway) and I can't help thinking I'd be a bit late to the party having 'lost' the opportunity to make the maximum saving from 2016 and paid class 3 NICs for this financial year up to the current month so the best I could achieve is 17 months of lower NICs.
Yes I know it's still worth it but at the moment I'm not sure my brain is up to it.
Thanks you so much for taking the time to post your suggestion.