State Pension: Paying off gaps/shortfalls in record - worth it?

homeless9

Hi,

I have 2 annual shortfalls/gaps in my state pension which I have 1 and 2 years left to decide if I want to fill those gaps with payments of £450 and £500.

I am almost 37 and have 18 more years to contribute to get the full state pension. This means I'd reach this target at age 55. I understand people typically work to at least this age, so I likely will too. So in that case I guess it's pointless paying these shortfalls?

Does anyone know what 1 years contributions counts for in terms of extra £ towards the pension. Say I pay one of these gaps off for one of these sums, say £500.... what am I getting in £ return from the state when I retire?

Say I retired aged 50 and therefore needed 5 years more to qualify for the full state pension, could I just pay off the gap each year up to age 55, or won't they allow this?

molerat

Your SPA is 68 so have around 31 years left to get the required 18.  I don't think it is really worth buying those 2 years at your stage in the game. Put that £950 somewhere else.

One year contributions currently gets you just over £5 per week (£179.60 / 35)

Yes, you will be able to top up any years needed pre retirement so could leave it say from age 63 and pay yearly from then.  No point paying too far ahead of time as you could lose an argument with a No 10 bus so those contributions would be wasted.

Just make a plan so you know what to do.

Alexland

I would agree that if you expect to work until around 55 or longer then it probably wouldn't be worth buying or completing those years now and it's likely they would continue to offer you the opportunity to buy missing future years. Having said that we did complete an old year for my younger wife who is a similar age to you because we are hoping to retire early enough that she would need to buy extra years anyway.

jamesd

Those two years are quite cheap, how does the retirement plan and potential and desire to retire before 55 or 57 look?