Should I buy extra state pension years?

JudgeDekker

Hello. Just wondering if anyone has any sugggestions, please. I've just checked my NI record at Gov.uk and discovered that I only received National Insurance credits until my son is twelve, even though we are still receiving child benefit. This means that I have a total of 24 years accrued through working and childcare, but I'm not working now and haven't for a few years, so I'm currently stuck on 24 years. It costs £800 to buy an extra year getting me £5/week extra pension, so if I live for four years after starting to claim the state pension I'll break even on the top-up, so it seem to make sense to pay for extra years top up.

But I'm not sure - I need to get another eleven years, and I won't retire for another nineteen. So presumably if I got another little job in five years time, then any extra years I buy now would be money unnecessarily spent. So maybe I should be wait before buying extra years. But on the other hand maybe the government will take away the right to buy extra years, or put the cost up, or increase the number of years you need, so perhaps I should buy now whilst I still can.

Any advice or suggestions gratefully received. Thanks very much.

Dazed_and_C0nfused

As you are under transitional rules the number of years really doesn't matter much.

What does your State Pension forecast actually say?

Purchasing extra years is likely to be a good investment.  £800 may get you £5/week for ever.

xylophone

You have obtained a state pension forecast?

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

What exactly does it say?

sevenhills

JudgeDekker said:

Hello. Just wondering if anyone has any sugggestions, please. I've just checked my NI record at Gov.uk and discovered that I only received National Insurance credits until my son is twelve, even though we are still receiving child benefit.

It only goes up to age 12, I guess that because they believe both parents should work.

frayedknot

Dazed_and_C0nfused said:

As you are under transitional rules the number of years really doesn't matter much.

What does your State Pension forecast actually say?

Purchasing extra years is likely to be a good investment.  £800 may get you £5/week for ever.

Well until she dies. What about pension credit, won't that help make up the shortfall without buying extra years.

Silvertabby

frayedknot said:

Dazed_and_C0nfused said:

As you are under transitional rules the number of years really doesn't matter much.

What does your State Pension forecast actually say?

Purchasing extra years is likely to be a good investment.  £800 may get you £5/week for ever.

Well until she dies. What about pension credit, won't that help make up the shortfall without buying extra years.

Pension credit is means tested.  

openside50

If you look at what it costs to buy a private pension/annuity these days - that £800 is an absolute bargain

fred246

Just have another baby. Job done.

ukdw

fred246 said:

Just have another baby. Job done.

Or look after grand children for a few hours a week.

JudgeDekker

xylophone said:

You have obtained a state pension forecast?

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

What exactly does it say?

The state pension forecast is actually very misleading, if you ask me. It says, in huge letters, "your forecast is £175.20 a week". But actually that's only if I contribute another ten years before 2039. In smaller letters underneath it says "based on your National Insurance record up to 2020: £129.77".

It seems pretty clear that I should buy the extra years, cos I'm backing myself to live past 71 (four years beyond 67, when I can start claiming the state pension). And if I don't, then I won't be worrying about my pension anyway. But I wondering whether to buy them now or wait a few years. Looking after the grandchildren in years to come is a great point, I never thought of that. Thanks very much.

molerat

£175.20 - £129.77 = £45.43 / £5 = 9.  You need 9 more years to get within 38 pence of the full amount, 38 pence is all your 10th £800 would buy you.  Looking at your gaps from 2006 onwards are there any cheap part filled years ?