State pension - paying additional contributions to get full State Pension

marlot

Dazed_and_C0nfused said:

drumtochty said:

No the tax year you are talking about she would do her Self Employed work is 2020/2021. As she gets her state pension in summer 2021. She cannot pay NI for work after 5 April 2021. Therefore she must pay the Class 2 NI for the 2020/2021 Tax year. She must be registered for the 2020/2021 tax year as self employed by early October 2020. In order for that registered self employed "name" to be found by the self assesment system from 6 April 2021.

That sounds odd, basically it means anyone who starts self employment later on in the tax year cannot pay Class 2 National Insurance.

Have never heard of that before, surprised it hasn't caused a few moans on here before now.

Yes, I was caught by that one.  The self assessment system was willing to let me pay class 2s for the period from dec (when I registered) to march, but that wasn't enough to gain an extra year of entitlement.
 Fortunately I have a few more years in which I can make my class 2s.

claire111

marlot said:

Dazed_and_C0nfused said:

drumtochty said:

No the tax year you are talking about she would do her Self Employed work is 2020/2021. As she gets her state pension in summer 2021. She cannot pay NI for work after 5 April 2021. Therefore she must pay the Class 2 NI for the 2020/2021 Tax year. She must be registered for the 2020/2021 tax year as self employed by early October 2020. In order for that registered self employed "name" to be found by the self assesment system from 6 April 2021.

That sounds odd, basically it means anyone who starts self employment later on in the tax year cannot pay Class 2 National Insurance.

Have never heard of that before, surprised it hasn't caused a few moans on here before now.

Yes, I was caught by that one.  The self assessment system was willing to let me pay class 2s for the period from dec (when I registered) to march, but that wasn't enough to gain an extra year of entitlement.
 Fortunately I have a few more years in which I can make my class 2s.

The online system has just allowed me to register self employed as of 7 April 2020...so we'll see what happens when it comes to paying NICs 

I do already file a return for property income so maybe that is what allows me to enter that date..

DaveMcG

nigelbb said:

If the Future Pensions Centre say that is the cheapest way of maximising her pension then you should accept this as they are the experts.

Seriously?

drumochty pointed out why they might be wrong and I can't find any defects in his reasoning (assuming the info provided by the original poster is correct, (in particular "All of these were prior to April 2006"). It is far more likely that the Future Pensions operative lazily ignored the nuances of the switch from old state pension to the new and simply picked the cheapest six years, than drumochty is incorrect.

nigelbb

DaveMcG said:

nigelbb said:

If the Future Pensions Centre say that is the cheapest way of maximising her pension then you should accept this as they are the experts.

Seriously?

drumochty pointed out why they might be wrong and I can't find any defects in his reasoning (assuming the info provided by the original poster is correct, (in particular "All of these were prior to April 2006"). It is far more likely that the Future Pensions operative lazily ignored the nuances of the switch from old state pension to the new and simply picked the cheapest six years, than drumochty is incorrect.

I doubt it. I had a long conversation with the Future Pensions Centre who explained how the system worked & which years it was worth paying for & this was followed up with a letter explaining it all. If the OP's wife did as instructed by the FPC to maximise the pension & it was wrong they would have cause for redress.

molerat

nigelbb said:

DaveMcG said:

nigelbb said:

If the Future Pensions Centre say that is the cheapest way of maximising her pension then you should accept this as they are the experts.

Seriously?

drumochty pointed out why they might be wrong and I can't find any defects in his reasoning (assuming the info provided by the original poster is correct, (in particular "All of these were prior to April 2006"). It is far more likely that the Future Pensions operative lazily ignored the nuances of the switch from old state pension to the new and simply picked the cheapest six years, than drumochty is incorrect.

I doubt it. I had a long conversation with the Future Pensions Centre who explained how the system worked & which years it was worth paying for & this was followed up with a letter explaining it all. If the OP's wife did as instructed by the FPC to maximise the pension & it was wrong they would have cause for redress.

Agreed.  FPC are now on the ball.  It took them a couple of years after 2016 to get there but they are on top of it now.

peter021072

Does it matter WHEN people top up their state pension? 
For example I could top up to the maximum now, even though I have 6-7 years before I can take the state pension.  Is it best to save it in a bank account then contribute later?  

molerat

peter021072 said:

Does it matter WHEN people top up their state pension? 
For example I could top up to the maximum now, even though I have 6-7 years before I can take the state pension.  Is it best to save it in a bank account then contribute later?  

VNI rates increase with inflation each year so will money in the bank keep up with the rise ?

but

If you pay early and get run down by a bus the money is gone.

Like all things in life it is a gamble whichever way you go but you could likely spreadsheet a cost scenario an sort out a sweet spot of buy some now and

some later.  Buying at the very end of the 2 year price fix is probably the best of both worlds.

peter021072

molerat said:

peter021072 said:

Does it matter WHEN people top up their state pension? 
For example I could top up to the maximum now, even though I have 6-7 years before I can take the state pension.  Is it best to save it in a bank account then contribute later?  

VNI rates increase with inflation each year so will money in the bank keep up with the rise ?

but

If you pay early and get run down by a bus the money is gone.

Like all things in life it is a gamble whichever way you go but you could likely spreadsheet a cost scenario an sort out a sweet spot of buy some now and

some later.  Buying at the very end of the 2 year price fix is probably the best of both worlds.

are you sure it's a 2 year fix ?  I've just checked, and it says:

"If you’re a man born after 5 April 1951 or a woman born after 5 April 1953
You can pay voluntary contributions by 5 April 2023 to make up for gaps between 6 April 2006 and 5 April 2016 You’ll pay the current rate"
https://www.gov.uk/voluntary-national-insurance-contributions/rates

So that's slightly longer than 2 years?

molerat

NI voluntary contribution rates are fixed at the price of the year concerned for 2 years after the end of that year.  After that they increase to the price of the year in which they are paid for a further 4 years, until 6 years after the end of the year, after which they become no longer available.  For the transitional period the 10 years prior to the introduction of the new scheme, 2006-07 to 2015-16, were payable at special fixed rates until April 2019 and then at the price of the year they are paid in until April 2023.  This treated the 10 years prior to the introduction of the new scheme the same as the first year, 2016-17.