Guide discussion: Voluntary national insurance contributions

InhaleMood

molerat said:

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 ?

Yes, I am very confused! 
So he has been self employed. 2011-2015 and 2020-2021. We must not have ticked the box to pay voluntary NI contributions for those. (£824x6 years?)
Between 2016-2020 he was out of the country.
He is Sri Lankan and only moved to this country in 2011.
I guess I'm trying to understand:
1) how much can he pay now?
2) how much extra will that result in at pension age?
3) does he have to pay all of it, or is it a sliding scale? He pays x% of 1 and so he gets x% of 2?

I can't see any figure of £164.33 anywhere?

Thank you! I'm normally pretty savvy but this is going over my head!

molerat

He needs to speak to HMRC to see if he is eligible to pay backdated class 2 for the self employed years, they are only around £164 each, and tell them he was out of the country and they should then become payable at £824.20...... but if he was working overseas he may be able to pay class 2 for those years as he would have a work history prior to going Social Security abroad: NI38 - GOV.UK

It looks like his maximum pension would be £195.93 - the £132.73 shown + the 10 past years at £6.32.

He can pay as many full years as he wishes but only full years count, half a year is worthless.

But he needs to get a move on as all years 2018-19 and earlier cease to be available from April 2025.

Tiz_world

Hi, 
In 2022 I found this forum was really helpful whilst trying to work out how to manage my NIC shortfalls.
In 2023 I paid for 8 very old years which altered my forecasted SP and then received 2 letters from HMRC this year:

One letter requesting GBP907.40 for the year 2023/24.
And one listing the 9 years from 2011/12 through to 2019/20 as 'year is not full', at a cost of GBP824.20 per year and their due by dates. 

I had thought I'd got a handle on this but perhaps not.
Would the forum be able to help me sort out a question, please? 

I had 32 years when I bought the 8 years in 2023, so that must be 40years total.
I think the maximum I need to pay is for 6 or possibly 7 more years.
Whereas listed by HMRC are 9 years, 2011/12 through to 2019/20, plus the 2023/24!

My State Pension forecast is: 
Pension starts in March 2029
Forecast 214.45pw
Based on the NI record to April 2023 182.85pw  
Contribute until 2028 214.20pw
The most I can increase the forecast is 221.20pw
COPE 19.40pw.

Clarity from the forum would be most appreciated! 
Thanks.

molerat

You need 7 to teach the max, 6 will leave you 43p short.  HMRC, as a tax collector, don't know how contributions affect your pension, they have simply sent you a list of "unpaid voluntary tax" gaps. And those pre 2016 gaps will unlikely add anything to your pension.

Dazed_and_C0nfused

Tiz_world said:

Hi, 
In 2022 I found this forum was really helpful whilst trying to work out how to manage my NIC shortfalls.
In 2023 I paid for 8 very old years which altered my forecasted SP and then received 2 letters from HMRC this year:

One letter requesting GBP907.40 for the year 2023/24.
And one listing the 9 years from 2011/12 through to 2019/20 as 'year is not full', at a cost of GBP824.20 per year and their due by dates. 

I had thought I'd got a handle on this but perhaps not.
Would the forum be able to help me sort out a question, please? 

I had 32 years when I bought the 8 years in 2023, so that must be 40years total.
I think the maximum I need to pay is for 6 or possibly 7 more years.
Whereas listed by HMRC are 9 years, 2011/12 through to 2019/20, plus the 2023/24!

My State Pension forecast is: 
Pension starts in March 2029
Forecast 214.45pw
Based on the NI record to April 2023 182.85pw  
Contribute until 2028 214.20pw
The most I can increase the forecast is 221.20pw
COPE 19.40pw.

Clarity from the forum would be most appreciated! 
Thanks.

I think you have misunderstood a few things.

HMRC don't normally "request" Voluntary Class 3 NI.  The key word is "voluntary".  They may make you aware it can be paid, but that would be your choice as to whether to pay it or not.

You are conflating two things, the number of years that are available.  And the number of years needed (to reach your personal maximum new State Pension).

If you add six post 2016 years you will turn your current entitlement of £182.85 into £220.77.  If you added a seventh and final year this would take you to your personal maximum of £221.20.  But given this seventh year is only adding £0.43/week you may consider it not worth paying £800-900 for.

It may be the pre 2016 years could add to your entitlement but without more information I don't think that is 100% certain.

jem16

Tiz_world said:

I had 32 years when I bought the 8 years in 2023, so that must be 40years total.
I think the maximum I need to pay is for 6 or possibly 7 more years.

Looking back at your previous comment you had 24 years and then bought 8 years making up to 32 years. 

molerat

jem16 said:

Tiz_world said:

I had 32 years when I bought the 8 years in 2023, so that must be 40years total.
I think the maximum I need to pay is for 6 or possibly 7 more years.

Looking back at your previous comment you had 24 years and then bought 8 years making up to 32 years. 

I was running the numbers through my spreadsheet and could not reconcile "40 years" so it looks like they may be split 29/3 which means a pre 2016 year would add value. OP would need to clarify the actual position.

jem16

molerat said:

jem16 said:c

Tiz_world said:

I had 32 years when I bought the 8 years in 2023, so that must be 40years total.
I think the maximum I need to pay is for 6 or possibly 7 more years.

Looking back at your previous comment you had 24 years and then bought 8 years making up to 32 years. 

I was running the numbers through my spreadsheet and could not reconcile "40 years" so it looks like they may be split 29/3 which means a pre 2016 year would add value. OP would need to clarify the actual position.

I suspect you’re right given the letters from HMRC about voluntary contributions. Seems to give prices for 2011/12 through to 2019/20 and then 2023/24 which would suggest that 20/21, 21/22 and 22/23 are full. The other five years filled would have been 2006/7 through to 2010/11. 

Tiz_world

Thankyou for the feedback. 
Ive re-checked my papers and need to correct my mistake - I have 32 years as of now.
So the 8 I bought were added to a former 24 years.  

jem16

Tiz_world said:

Thankyou for the feedback. 
Ive re-checked my papers and need to correct my mistake - I have 32 years as of now.
So the 8 I bought were added to a former 24 years.  

Perhaps you could clarify which 8 years you bought?