Voluntary NI contributions

skyela

I'm 32 and trying to think ahead... 

I have 14 years of full NI contributions years. 
36 years to contribute according to the government website.
2 years when I did not contribute enough.

2018/19 I need to pay £246.40
2019/20 I need to pay £525

Is it worth paying these considering I will have plenty more years to make it up? Or should you try to keep it 100%? 

I could possibly pay the smaller one, but I don't really want to be £700+ poorer if it makes little difference at this stage. 

Thanks 

Dazed_and_C0nfused

You haven't told us heat you have a cried to date but you will x years to reach the standard new State Pension of £179.60

If you expect to be working or gaining credits for this number of years then there is no point in paying for them.

Of course things can change (including State Pension rules) so it may turn out buying them would have been a good idea but it could just as easily be wasted money.

Alexland

You are under transitional rules so what matters is how much entitlement (in £ per week) your existing NI contributions have given you and how many years the website says you will still need to contribute to get to the maximum SP. Then it really depends if you intend to pay NI (or gain NI credits from being a parent of a child under 12, etc) for enough future years to get the full SP anyway without paying to complete these 2 old years.

Completing old NI years in your 30s is unusual especially as you already have 14 complete years but if you expect to have large investments (Pensions, S&S ISAs, etc) to retire very early it might be worthwhile. We recently did it for my younger wife in her 30s but that's because she will hopefully retire with me when still in her 40s so we would have to buy NI years anyway to get to full SP although she might pay at the lower self-employed rate if that loophole still exists and she is still selling homemade stuff in her Etsy shop.

HCIMbtw

Is there any time limit on paying voluntary contributions? mine shows year is not full, for a few years.. offers me the opportunity of spending £800 to top up

Would rather wait 15 years before considering if it is worthwhile

QrizB

HCIMbtw said:

Is there any time limit on paying voluntary contributions? mine shows year is not full, for a few years.. offers me the opportunity of spending £800 to top up
Would rather wait 15 years before considering if it is worthwhile

Yes there's a time limit. Exactly how long you get is complicated by the current transitional arrangements.

From https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

You can usually pay voluntary contributions for the past 6 years. The deadline is 5 April each year.

but

You have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016 if you’re eligible.

skyela

Thanks for the replies. I'm guessing I'm no better off paying it at this stage 🙂

jamesd

A key question here is when you plan to retire, since that affects how many more years you expect to get through employment. But the time value of money also matters and with 36 years to go and only around 21 years needed to get to the single tier maximum you've plenty of time.

If you're planning to retire at 55 both years looks like a reasonable choice, that still might not work out best, but later than that and probably not worth either year.