Guide discussion: Voluntary national insurance contributions

dougal76

molerat said:

dougal76 said:

Forgive my ignorance but been checking for my wife as she didn't move to the UK until 2002 and took time out of work to go back to university. Her situation is that she needs to pay in fourteen more years in the next 18 years (when she can receive her state pension). She has 4 missing years (while at Uni) that she can top up. I presume if we buy/top them up she would only need 10 more years of paying in to get her full state pension?? Is this right?? She will be able to retire in 12 years with her company pension, so would be beneficial if these extra years meant she'd get her full state pension before she retires. Any info greatly appreciated!! 

As long as her forecast clearly states she needs another 14 years to reach the max then filling those years will reduce that number but due to them being pre 2016 years they may not reduce it by the full 4 depending on her precise circumstances.  Post up the following details and someone will tell you exactly what effect it will have.

Current weekly £££.pp amount accrued up to April 2023 or 2024, some have been updated so please specify.
Number of pre April 2016 NI years full
Number of post April 2016 NI years full
Tax year you reach state retirement
Any COPE amount shown, in a click link in "You've been in a contracted-out pension scheme", if there is one.
Years which show not full and prices

Hello,

Here's the information you asked me to post.

Current weekly amount up to 5th April 2024 is £135.63.
Pre 2016 full years is 5 years.
Post 2016 (Inc 2015/16) full years is 9 year.

Years not full are 2008/09, 2009/10, 2010/11 and 2011/12.

Retirement tax year is 2042.

Cope Amount is £8.59 per week.

So I'm wondering if buying these 4 years from 2008 to 2012 is worth it and whether it will reduce the number of years requires to get full pension from 14 to 10 years. 

Thanks 

molerat

Yes they will reduce the years needed by 4 to 10. Her gap, £85.57, is equivalent to 13.5 years so a full 14 needed and those 4 years will add £22.60 (at £5.65 each as her 2016 starting amount is calculated under the old rules, the equivalent of 3.6 years) leaving £62.96 = 9.9 years, so a full 10, needed.  Whether it is worth it when she has enough leeway at the other end is your call, buying early years is like a reverse life insurance - you have got to live to collect - step in front of that bus and all is lost.  You could always put that cost into a savings account and the interest will go a long way to paying the increased cost of filling at the other end if necessary - VCs increase with inflation each year.  Are any of those gaps part filled and cheap ?

Silverbrook

I am confused about state pension & voluntary contributions

I reached retirement age in September 2018 and have been receiving my pension since then. The amount I currently receive is £781.88 per month which is approximately £100 below the full new pension rate.

I have discovered that I have 2years when I didn’t have a full contribution record 2013/14 and 2011/12. These would cost me only £236 in total to make these up to full years.

 I was a member of the Teacher Pension Scheme for most of my working life and had presumed I was not receiving the full pension because of contracting out but can’t seem to find out whether it’s the contracted out or the 2 missing years which account for the shortfall.

Can anyone give me a steer on this?

Dazed_and_C0nfused

Silverbrook said:

I am confused about state pension & voluntary contributions

I reached retirement age in September 2018 and have been receiving my pension since then. The amount I currently receive is £781.88 per month which is approximately £100 below the full new pension rate.

I have discovered that I have 2years when I didn’t have a full contribution record 2013/14 and 2011/12. These would cost me only £236 in total to make these up to full years.

 I was a member of the Teacher Pension Scheme for most of my working life and had presumed I was not receiving the full pension because of contracting out but can’t seem to find out whether it’s the contracted out or the 2 missing years which account for the shortfall.

Can anyone give me a steer on this?

You cannot receive State Pension monthly, presumably you mean 4 weekly.

Which would be £195.74/week.

Buying those years is highly unlikely to add to your entitlement, it's post 2016 years which will be beneficial.

But you only had two years (16/17 & 17/18) where you could add to your starting amount so if those years are full then I suspect you are at your personal maximum.

You are getting slightly more than you could have expected under the old system but simply haven't had time between 2016 and your State Pension age to make up the standard new State Pension of £221.20/week.

bones1958

Hi,
Hopefully looking for clarification regarding requirement to pay 1 more year of voluntary NI contribution to bring me up to full amount of £221-20.

I am due State Pension in September 2024. For the last year or so I’ve had various phone conversations with Future Pension Service and HMRC to plug gaps in my NI record since I retired early from paid employment in 2016.

In the period from August 2016, I was registered as self employed for 4 years (Class 2 paid) and have NI credits for 2 years for receiving Carers Allowance. These have all now showed and updated on my NI record as full years after paying up a couple of part years for 18/19 and 22/23.

My issue is that FPS advised me that paying up these part years would increase my forecast to be the full £221-20 in time for claiming State Pension in September. There is still 1 outstanding year, basically after I retired, where I wasn’t working barring a couple of weeks casual work where I paid £99-56 NI. My Ni record suggests, if I pay £697-40 for that year (2017-2018), that will increase my State Pension from the currently quoted estimate of £215-09 to the full £221-20.

Dilemma is as follows:
1) should I claim State Pension now based on the lower estimate of £215-09.
2) if I paid the 1 year at £697-40, after claiming State Pension, would that then backdate State Pension payments to the full maximum once the payment processes through the system OR
3) should I wait until after State Pension starts being paid to decide if I should pay that 1 year showing as not full.

I was contracted out virtually all of my 41 years in paid employment, so do understand that latter years have needed bolstering to maximise my State Pension. One way or another, I’ll end up paying 49 or 50 years NI contributions to obtain the full amount of State Pension.

Any advice gratefully received. Thanks.

Dazed_and_C0nfused

You can only get the extra £6.11 from when you make the payment so paying after 11 September will mean you (slowly) start to lose the benefit of paying.

You aren't going to be able to earn anywhere remotely near £6.11/week by keeping hold of the £697.40 so paying it in time to get your maximum State Pension from the get go would seem to be the sensible option here.

molerat

Get it paid as soon as possible then claim your pension once it has shown up on your record, saves any messing around and recalculations - once you apply you get amounts and payment dates within a week or two.  Once the pension is in payment any additions are a manual operation and can take up to a year from payment to getting the extra in your pocket. £697.40 will pay back gross in 114 weeks at the current rate, nothing else comes close to a no brainer as this !

bones1958

@Dazed_and_C0nfused @molerat
Thank you very much to you both for your replies.
My mind is clear now what I need to do. Your advice has been most helpful.

edgex

I've gone through the gov.uk website, & i'm able to pay for gaps online. It's presenting me with a long list of options.
I assume I can pay for 1 of these now, & then do it again next month & make another payment?

Silvertabby

edgex said:

I've gone through the gov.uk website, & i'm able to pay for gaps online. It's presenting me with a long list of options.
I assume I can pay for 1 of these now, & then do it again next month & make another payment?

Make sure that filling these gaps will actually increase your pension.

My own gov.uk records indicated that one year was still available for payment, yet I had already reached the full nSP.