Should I make the voluntary contribution?

JMChip

Hi, here is my situation. The question is do I make the voluntary NI contribution?
I am 38 so will reach state pension age in Oct 2050. 
I currently have 16 years full NI contributions so in the 30 years I have left before 2050, I have to acquire 17 more years to get a full state pension. 
I have the opportunity to make a voluntary contribution of £719.10 to acquire another year. 
I DON'T think I should do this at this stage, as I work full time and have no intention of stopping at the moment so have plenty of time (30 years) to get my additional 17 years. Do you agree? 
Plus if in the future I stop working (might be a house husband!) can I buy additional years then should I need them to get full state pension?
Thanks for your help

eskbanker

Agree - based on what you've posted, there's no obvious reason to make a voluntary contribution at this stage if your SP forecast states that you need 17 more years and you're only 38.  As you say, if you cease paying employment-based NI in future years then there's no reason to suspect that you wouldn't be able to make similar voluntary contributions at that stage.

tacpot12

I would say that it is too early for buying additional years to be a sensible financial decision. It's likely that you will pay for many of these years anyway, and while you might need to pay one or two years towards the end (when they will cost more), the chances are you won't need to pay anything, so I would not pay now. 

You know what you need to do to get the full state pension, so try to plan things so that you make sufficient NI payments in the next 17-18years. You can work part time and still pay enough NI to qualify if your job is well paid enough, and if you are claiming certain benefits, you can also get NI Credits that make take the place of NI contribution you make yourself.  

If your situation does change then, as soon as it is clear that you definitely won't have enough full years contributions and you are not entitled to any NI credits, you can pay the voluntary contributions at that point to save a bit of money. This assumes that you have the money to make the payment easily. If money is very tight, it might be worth putting off the payment for a couple of years, in the hope that your situation eases. 

Marcon

JMChip said:

Hi, here is my situation. The question is do I make the voluntary NI contribution?
I am 38 so will reach state pension age in Oct 2050. 
I currently have 16 years full NI contributions so in the 30 years I have left before 2050, I have to acquire 17 more years to get a full state pension. 
I have the opportunity to make a voluntary contribution of £719.10 to acquire another year. 
I DON'T think I should do this at this stage, as I work full time and have no intention of stopping at the moment so have plenty of time (30 years) to get my additional 17 years. Do you agree? 
Plus if in the future I stop working (might be a house husband!) can I buy additional years then should I need them to get full state pension?
Thanks for your help

Nobody can predict the future. The state pension could look very different in 2050. One of those rare occasions where you do seem to have time on your side!

mark55man

Also, by being a house husband - if that includes childcare, then even if you OH is a higher rate earner (above the level at which you lose the entitlement as a family), it would still be worth you claiming child benefit as it is one of the benefits that also provides NI contributions. - even if you did nothing with the CB but put it into a savings account and pay it back when you OH does the tax return.  (It was a few years ago for me, but that was how my OH gained about 10 of her years).  Obviously CB normally is seen as the mother's - so a conversation would be needed, but if you OH is earning then it should be in your name for the NI benefit, even if your OH takes the money!

In terms of your other question I would not make the contribution now.  If you were worried about being able to afford repayments later, then put the money aside now into a passive S*S tracker (ideally global multi asset).  I would be astonished if that did not meet the ability to fund the relevant year in 30 years time!!.