Guide discussion: Voluntary national insurance contributions

Silvertabby

intalex said:

Dazed_and_C0nfused said:

intalex said:

molerat said:

No.  The tax year in which you reach SPA cannot be counted towards your SP entitlement.

Thanks, but in the months within that tax year leading up to the birthday, should NICs be deducted in payroll, and if so, should these NICs be refundable?

Yes they should be deducted and no they aren't repayable.

Isn't that a bit of a waste given they don't count for anything?

They help pay for the NHS and other benefits.

intalex

If anyone has a link to an official documentation outlining the method/formulae to arrive at the online estimate based on current NI record, I'll be grateful if you could share it.

Just trying to work out if the new state pension uplift (from £221.20 to £230.30) will have any impact on the pre-2016 portion and/or on the number of years' gap to fill to get to the full standard value. The online estimate will only update on or soon after 6th April, but the deadline to pay gaps will have lapsed by then.

molerat

The uplift will not affect the number of years you need nor will it have any effect on the relative value of the pre 2016 portion.  As an example if you have £208.56 now that is £12.64 short of the full amount, £12.64 / £6.32 = 2 years needed to top up.  That £208.56 will become £217.14 once it is uplifted from 6th April, £230.30 - £217.14 = £13.16 / £6.58 = 2 years needed.  All the calculations around the pre 2016 amount were really only for working out if it was worth topping them up with more pre 2016 years especially if there was COPE involved.  In short, come April 6th nothing will change apart from the ability to buy years 2018-19 and earlier will end and years 2019-20 to 2022-23 will increase in price to around £923.

intalex

molerat said:

The uplift will not affect the number of years you need nor will it have any effect on the relative value of the pre 2016 portion.  As an example if you have £208.56 now that is £12.64 short of the full amount, £12.64 / £6.32 = 2 years needed to top up.  That £208.56 will become £217.14 once it is uplifted from 6th April, £230.30 - £217.14 = £13.16 / £6.58 = 2 years needed.  All the calculations around the pre 2016 amount were really only for working out if it was worth topping them up with more pre 2016 years especially if there was COPE involved.  In short, come April 6th nothing will change apart from the ability to buy years 2018-19 and earlier will end and years 2019-20 to 2022-23 will increase in price to around £923.

Because of the pre-2016 portion having a different method, the gap between current and full standard state pension is not an exact whole multiple of £6.32 (nor will it be of £6.58 from 6th April).

At the moment, a couple of family members have tiny fractions above whole years (2.01 and 9.02) required to get to the full standard state pension ("years to full"), but at class 3 rates, it feels like a better choice to ignore the tiny fractions and only pay 2 and 9 years instead of 3 and 10 years.

Given the respective fillable gap years are all pre-2016 (with no extra legroom left between now and SPA), I was only trying to understand the underlying math to see if the triple-lock increases would sway the tiny fractions in either direction, but given that the underlying calculations are likely to be ultra-complicated (hence not easy/possible to find), I'll just have to accept the view that the "years to full" will remain insensitive to triple-lock increases.

molerat

A pre 2016 gap can be worth £6.32 or £5.65 (or even possibly £0.00) depending on which calculation was used for the starting amount and purchasing more could switch the basis of that calculation from old to new revaluing all pre 2016 years.  If you want to post up some real figures then it is fairly simple to work out.

Current weekly £££.pp amount accrued.
Number of full NI years 15-16 and earlier
Number of full NI years 16-17 and later
Tax year you reach state retirement
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account
Years which show not full and prices

intalex

molerat said:

A pre 2016 gap can be worth £6.32 or £5.65

Don't want to publish too many details, but the current maximum forecast is £209.82 and to get to the full state pension of £221.20 the payment wizard requires 3 rather than 2 full years so must be the latter with a precise ratio of 2.01 so I'm thinking paying just 2 full years should get close enough to the full state pension, both now and forever :-) 

robbiemann

HI,

As I dont have time to read all 106 pages of the group I dont know if this has been covered.

My wife and I have paid voluntary contributions to get us to the max entitlement of State pension, full in her case and a little short in mine.

We were wondering if,as this is NI, can we claim the tax we will have paid on the money used to make the voluntary payment back.

We are both just under State pension age and complete a yearly tax return due to property investments.

Robbie

jem16

robbiemann said:

My wife and I have paid voluntary contributions to get us to the max entitlement of State pension, full in her case and a little short in mine.

We were wondering if,as this is NI, can we claim the tax we will have paid on the money used to make the voluntary payment back.

In a word, no you cannot. NI isn’t tax deductable. 

InhaleMood

Hi,
I've been stuck on hold for 45 mins and counting to discuss this and potentially make a patient on behalf of my partner (he isn't able to pay online).

I saw someone suggested the useful information to include:

You currently have 3 years on your record and you need at least 10 years to get any State Pension

Current weekly £132.73 amount accrued up to April 2024

Number of pre April 2016 NI years full = ?

Number of post April 2016 NI years full = ?

Tax year you reach state retirement 2042

Years which show not full and prices
2020-21 - not full - no price shown
2019-20 - not full - £824.20
2018-19 - not full - no price shown
2017-18 - not full - no price shown
2016-17 - not full - no price shown
2015-16 - not full - no price shown
2014-15 - not full - £824.20
2013-14 - not full - £824.20
2012-13 - not full - £824.20
2011-12 - not full - £824.20

My understanding, which is probably incorrect, us that he can pay 5x £824.20 (£4121), and if he pays in for the next 18 years, he will be entitled to thr full state pension?

Is that correct?

molerat

I think your understanding may be way off

So £132.73 is not the amount accrued but the amount in the big green box at the top - the amount that can be achieved going forward ?

That amount is correct for 21 years, see below.

Why are those years not showing any price, is there a statement about checking ?  Were they self employed and not paying class 2 ?

Why have they got so few NI payments ?

It looks like they need to obtain another 32 years to reach the full amount so 18 available going forward and whatever is available from past years, 14 needed to reach the full amount with only 10 unfilled.  The forecast should cast a bit more detail on that, there should be other amounts shown but will likely be incorrect due to those unpriced years - is there a figure of £164.33 showing ?