Guide discussion: Voluntary national insurance contributions

molerat

No point paying as you need 14 more years with 31 years left to get them.

moneyworrier2021

molerat said:

No point paying as you need 14 more years with 31 years left to get them.

Thanks for answering so quickly. That's one thing I don't need to worry about then. now to maximise private pension

pinnks

If you worked for those 2 years in the EU or a country with which we have a similar social security agreement, don't forget that you'll get a tiny pension from country in due course, as your UK years will be added to those 2 years to help you get past any minimum period requirements like the UK's 10 years...
 

Andando

 I reached the state pension age of 66 in the UK this year in November 2024 and am now receiving a weekly pension of £159.57. I didn’t take a copy of my total years fully paid NI but I recall that is was roughly 28 years all prior to tax year 2005/2006. I was also contracted out for a number of years although I cannot provide the amount that was given in my pension forecasts. I've been living and working in Spain since 2003. I have applied using CF83 online to determine if I can pay any or all years I need at the class 2 rate.

I am looking to maximise my pension by paying to fill gaps (list of years below). I am trying to work out which years I should be buying and what the potential effect will be on my pension.

Current weekly payment is £159.57 a week

Most I can get is £221.20 a week

Number of full NI years 2005 / 2006 and earlier = 28

Number of full NI years 2006 / 2007 and later = 0

Tax year I reached state retirement 2024/2025

COPE estimate not known

Years available to buy and class 3 rates which may be potentially payable as class 2:

post 2016		pre 2016
2023 / 2024	£907.40	2010 / 2011	£824.20
2022 / 2023	£824.20	2009 / 2010	£824.20
2021 / 2022	£800.80	2008 / 2009	£824.20
2020 / 2021	£795.60	2007 / 2008	£824.20
2019 / 2020	£824.20	2006 / 2007	£824.20
2018 / 2019	£824.20
2017 / 2018	£824.20
2016 / 2017	£824.20

I understand that purchasing years post 2016 add a weekly figure of £6.32 per week and that purchasing years pre 2016 add a weekly figure of £5.65 per week. 

I intend purchasing up to 10 years. 8 post 2016 years would add £50.56 per week and 2 pre 2016 years would add £11.30 per week giving 61.86 which when added to my current 159.57 is just over the max £221.40.

Do these calculations seem reasonable? I will of course confirm that paying these years will result in increasing the pension as I anticipate.     

I recall having seen on another forum that once you begin receiving your pension you can still purchase gap years but this is no longer available at class 2 rates and can only be made at class 3 rates. I have looked everywhere on the official www.gov.uk site but cannot find confirmation either way. Can anyone with personal knowledge let me know their experiences?

Notwithstanding the class 2/3 question. When I pay additional years do the extra payments take effect immediately or are they applied at the beginning of the new tax year?

With regard to making payments I read that there are inevitable delays to applying the purchased years to the pension. Is the date of the payment being made retrospectively applied to the pension payments?

I have read many of the posts in this forum and apologise If I have failed to find the answers to my questions and thankyou in anticipation.

Bo

Dazed_and_C0nfused

Andando said:

 I reached the state pension age of 66 in the UK this year in November 2024 and am now receiving a weekly pension of £159.57. I didn’t take a copy of my total years fully paid NI but I recall that is was roughly 28 years all prior to tax year 2005/2006. I was also contracted out for a number of years although I cannot provide the amount that was given in my pension forecasts. I've been living and working in Spain since 2003. I have applied using CF83 online to determine if I can pay any or all years I need at the class 2 rate.

I am looking to maximise my pension by paying to fill gaps (list of years below). I am trying to work out which years I should be buying and what the potential effect will be on my pension.

Current weekly payment is £159.57 a week

Most I can get is £221.20 a week

Number of full NI years 2005 / 2006 and earlier = 28

Number of full NI years 2006 / 2007 and later = 0

Tax year I reached state retirement 2024/2025

COPE estimate not known

Years available to buy and class 3 rates which may be potentially payable as class 2:

post 2016		pre 2016
2023 / 2024	£907.40	2010 / 2011	£824.20
2022 / 2023	£824.20	2009 / 2010	£824.20
2021 / 2022	£800.80	2008 / 2009	£824.20
2020 / 2021	£795.60	2007 / 2008	£824.20
2019 / 2020	£824.20	2006 / 2007	£824.20
2018 / 2019	£824.20
2017 / 2018	£824.20
2016 / 2017	£824.20

I understand that purchasing years post 2016 add a weekly figure of £6.32 per week and that purchasing years pre 2016 add a weekly figure of £5.65 per week. 

I intend purchasing up to 10 years. 8 p wasost 2016 years would add £50.56 per week and 2 pre 2016 years would add £11.30 per week giving 61.86 which when added to my current 159.57 is just over the max £221.40.

Do these calculations seem reasonable? I will of course confirm that paying these years will result in increasing the pension as I anticipate.     

I recall having seen on another forum that once you begin receiving your pension you can still purchase gap years but this is no longer available at class 2 rates and can only be made at class 3 rates. I have looked everywhere on the official www.gov.uk site but cannot find confirmation either way. Can anyone with personal knowledge let me know their experiences?

Notwithstanding the class 2/3 question. When I pay additional years do the extra payments take effect immediately or are they applied at the beginning of the new tax year?

With regard to making payments I read that there are inevitable delays to applying the purchased years to the pension. Is the date of the payment being made retrospectively applied to the pension payments?

I have read many of the posts in this forum and apologise If I have failed to find the answers to my questions and thankyou in anticipation.

Bo

You are entitled to the extra pension from when you make the payment.

But as an existing pensioner you may be waiting sometime for DWP to actually recalculate your entitlement and start paying the new rate.   You should eventually receive a one off arrears payment relating to the month's between you paying and the increased rate being paid each week/4 weeks.

molerat

Andando said:

 I reached the state pension age of 66 in the UK this year in November 2024 and am now receiving a weekly pension of £159.57. I didn’t take a copy of my total years fully paid NI but I recall that is was roughly 28 years all prior to tax year 2005/2006. I was also contracted out for a number of years although I cannot provide the amount that was given in my pension forecasts. I've been living and working in Spain since 2003. I have applied using CF83 online to determine if I can pay any or all years I need at the class 2 rate.

I am looking to maximise my pension by paying to fill gaps (list of years below). I am trying to work out which years I should be buying and what the potential effect will be on my pension.

Current weekly payment is £159.57 a week

Most I can get is £221.20 a week

Number of full NI years 2005 / 2006 and earlier = 28

Number of full NI years 2006 / 2007 and later = 0

Tax year I reached state retirement 2024/2025

COPE estimate not known

Years available to buy and class 3 rates which may be potentially payable as class 2:

post 2016		pre 2016
2023 / 2024	£907.40	2010 / 2011	£824.20
2022 / 2023	£824.20	2009 / 2010	£824.20
2021 / 2022	£800.80	2008 / 2009	£824.20
2020 / 2021	£795.60	2007 / 2008	£824.20
2019 / 2020	£824.20	2006 / 2007	£824.20
2018 / 2019	£824.20
2017 / 2018	£824.20
2016 / 2017	£824.20

I understand that purchasing years post 2016 add a weekly figure of £6.32 per week and that purchasing years pre 2016 add a weekly figure of £5.65 per week. 

I intend purchasing up to 10 years. 8 post 2016 years would add £50.56 per week and 2 pre 2016 years would add £11.30 per week giving 61.86 which when added to my current 159.57 is just over the max £221.40.

Do these calculations seem reasonable? I will of course confirm that paying these years will result in increasing the pension as I anticipate.     

I recall having seen on another forum that once you begin receiving your pension you can still purchase gap years but this is no longer available at class 2 rates and can only be made at class 3 rates. I have looked everywhere on the official www.gov.uk site but cannot find confirmation either way. Can anyone with personal knowledge let me know their experiences?

Notwithstanding the class 2/3 question. When I pay additional years do the extra payments take effect immediately or are they applied at the beginning of the new tax year?

With regard to making payments I read that there are inevitable delays to applying the purchased years to the pension. Is the date of the payment being made retrospectively applied to the pension payments?

I have read many of the posts in this forum and apologise If I have failed to find the answers to my questions and thankyou in anticipation.

Bo

Those workings look good (apart from a couple of typos - 2005-06 and £221.40 ).  You just need the 28 years confirming as you would unlikely be able to go to more than 30 pre 2016.

And as D&C says, it ain't gonna be quick getting sorted, hopefully if they have received the CF83 the April 2025 cut off should be extended if they have not replied in time.

westholm

Help!

HMRC refuse to accept that I can make voluntary class 2 NI contributions back as far as 2006-07. They say "class 2 NI can only normally be backdated six years." They sent me a decision letter, I disputed it and I've just received another letter saying they are right.

In my dispute letter I enclosed copies of NIM72270 and regulation 61B (links follow):
https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim72270
https://www.legislation.gov.uk/uksi/2001/1004/regulation/61B

Has anybody successfully made voluntary class 2 NI contributions back more than six years for self-employment in the UK? (Not for working abroad.)

EDIT:
I have only 11 full years in my NI record. Making voluntary contributions back as far as 2006 would triple that to 33 years by the time I reach retirement age in 2028 (67).

molerat

At one time you had to apply for the small earnings exception to not pay class 2.  If you did not apply for this then you cannot pay voluntary class 2 because your compulsory tax, which you did not apply to be exempted from even though it would likely be £0, is too late to pay.  That is the big brick wall that many self employed are now coming up against and something you have had since 2013 to rectify.

pinnks

I agree with Molerat. 

You need to read the guidance and the law carefully, as HMRC appear to be doing despite your protestations.  In the guidance you need to read from the line which reads, "Those entitled but not liable to pay Class 2 NICs are self-employed earners:" and the list that follows.  As Molerate says, unless you made a Small Earnings Exception election (or meet one of the other criteria) you are out of time to change those earlier years.  

The guidance is, of course, based on the legislation and Regulation 61B (1) is clear, "this regulation applies to Class 2 contributions which a person (“the contributor”) was entitled, but not liable, to pay in respect of one or more of the tax years 2006-07 to 2015-16".  Absent a SEE election you remained liable to pay, so do not meet the condition in paragraph (1).  

westholm

Thanks for the replies. It seems I am not eligible for voluntary class 2 NI earlier than the last six years. I accept what HMRC is saying now and I've edited my earlier post. I can pay 12 years of class 3 and 10 years of class 2 before I retire which will triple my pension.