Guide discussion: Voluntary national insurance contributions

molerat

murfjohn said:

Silvertabby said:

murfjohn said:

I am 66 already claiming pension and following Martin's guide found I am seven years short of NI contributions. This shortfall was because I took early retirement and didn't claim anything. I was told at the time NI contributions were fully paid up and would not need to pay anymore. This was from the job centre and was obviously incorrect.  I have contacted the Voluntary National Insurance Contributions on 0800 7310469, and was told as I had some thirty years ago been contracted out, they would have to work out how best to proceed, and because of the number of enquiries this might take up to three months. So that was a month ago. I will update this as and when i get the details.

With that amount of contracted out service, only 2016/17 onwards contributations will add to your State pension.  

Sorry I didn't make it clear in my post. I was not contracted out for thirty years but thirty years ago was contracted out for a few years. Not a clue how many as my memory is not as good as it was

The number of years contracted out is pretty much irrelevant. Did you ask what your COPE amount is when you called ? That is the most important number to know that is not available on line post retirement. Working out what to pay is as simple as checking how many pre and post 2016 years are held and which years are not full.  Any gaps post 2016 will add to your pension at £5.29 per week up to the max.  The only doubt is over pre 2016 gaps.  If you have more than 35 pre 2016 years then any more cannot add to your pension.

If you stopped work pre 2016 then that would have been absolutely the correct information if you had 30 years of contributions.

southw

Further to your article and the note below, I went into my local JobCentre (Truro) last week and enquired about being able to plug NI gaps for free when I was entitled to but not claiming JSA (and UC) in the past, but they just said that they didn't know anything about NI.

 

Can you help further on this point, please? As I am currently on UC and my present SP forecast is only £75/week, I really need some extra years without having to pay for them. (NB I'm not likely to get Pension Credit to raise my income as a pensioner as hope to be left some savings by my mother.)

Note below relevant too - and emailed to Brokenlink address:

I read your piece on NI contributions and State Pension with interest - and will now try to plug some of my gaps for free claiming that I could have been on benefits and wasn't, which was indeed the case, rather than trying to find money to pay for them.  However, I see that one is supposed to contact the local JobCentre about this and my experience of dealing with them about NI contributions matters in general is that they are NOT well versed and tend to trot out what they read on government websites. ALSO I am on UC now and don't have a specific person at the JobCentre to go to about anything due to this.

 

However, there are two other points to be made:

 

1. You do not seem to be aware of a BIG issue with NI contributions for those on Universal Credit. In this situation it is well-nigh impossible to plug gaps as the NI contributions to which one is entitled on UC are NOT being awarded in real time but only made-up on the system up to a maximum of four months before commencement of State Pension. (I am told this is because the DWP and HMRC systems are not talking to each other.) I WISH someone would raise the profile of this problem.

 

This issue affects me as it covers my existing situation and also the information needed to plug gaps (issue as mentioned in my first paragraph) is thereby lacking as HMRC (I have spoken to them and DWP about this and been told in writing by DWP to contact my MP about the issue) do NOT have any record of my being on UC (for more than two years now in my case).

 

I have contacted my MP and their office took it up, BUT have had NO reply from the Minister to date - after months.

 

Any suggestions would be welcome. (Btw I was told by Citizens Advice to raise a complaint about this with DWP and also take it up with my MP, but DWP rejected my complaint as they said one wasn't allowed to make a complaint about what is a systems issue and also told me to go to my MP about it!) 

 

2. As a second issue, I saw somewhere that, although I was told by HMRC that one can plug gaps back to 2016 at present (and until 5th April 2023), one can actually plug gaps to way back at present in the NI record to add to future SP (when one comes of age for this). Is this correct, please? HMRC don't seem to be aware of this as that option was not offered to me when I spoke to them about plugging gaps a few months back.

 

I will hope to hear from you about these matters.

JJAGSP

The calculator in you guide does not work, or always answer the question as 3 years.  My shortfall is 11 years or £9066 top up.

Topping up would give me £35 extra per week to the max £185 currently.  Do the math........that's over 21 years to get my money back ?????!!!!

Silvertabby

JJAGSP said:

The calculator in you guide does not work, or always answer the question as 3 years.  My shortfall is 11 years or £9066 top up.

Topping up would give me £35 extra per week to the max £185 currently.  Do the math........that's over 21 years to get my money back ?????!!!!

If you are only £35 per week short of the full State pension then you only need to pay (in round figures) 7 years of NI contributions.

That's an extra £1,825 per year of index linked State pension in return for a one-off payment of £5,600.  That's a break even of just a little over 3 years, or just under 4 years if you will be a basic rate taxpayer in retirement.

wiley353

i have been employed in the public sector from ages 18-51 and then sporadiclly in private sector until now-58 years of age.  . I have 39 full contributions according to my N.I. record, However due to being contracted out during my public sector employment Im being told by Hm pensions that in order to qualify for a full state pension i need 44 years full contributions. Do this sound correct.? I do have the option to purchase 3 "shortfall years" for a total of £600-sounds like a good deal -if its necessary. Any thoughts please?

molerat

Sounds about right for a long public sector employment.

If those part filled years are post 2016 then in all likelihood they will add to your pension, pre 2016 years are unlikely to add value.

Post up your current amount up to April 2022 (or possibly still showing 2021), your number of pre 2016 years, number of post 2016 years, your COPE amount, your gap years and the tax year in which you reach SRA and people here will be able to work it all out for you.

p00hsticks

JJAGSP said:

The calculator in you guide does not work, or always answer the question as 3 years.  My shortfall is 11 years or £9066 top up.

Topping up would give me £35 extra per week to the max £185 currently.  Do the math........that's over 21 years to get my money back ?????!!!!

As answered in the other thread you posted on, your maths is wrong on two counts

a) With £150 already, your shortfall is not 11 years, it's 7, so the required cost at current prices would be £5770 not £9066.

b) Your calculation of when you get your money back is mixing up months and weeks

https://forums.moneysavingexpert.com/discussion/6378288/state-pension#latest

wiley353

molerat said:

Sounds about right for a long public sector employment.

If those part filled years are post 2016 then in all likelihood they will add to your pension, pre 2016 years are unlikely to add value.

Post up your current amount up to April 2022 (or possibly still showing 2021), your number of pre 2016 years, number of post 2016 years, your COPE amount, your gap years and the tax year in which you reach SRA and people here will be able to work it all out for you.

Full year N.I. 80-17/18, short fall years 17/18,(237 to top up) 19/20,(126 top up) 21/22 (200 top up). COPE £160 as of April "22  . SRA 17/09/31. unlikely to have full year N.I. to 2031 due to health issues

p00hsticks

wiley353 said:

molerat said:

Sounds about right for a long public sector employment.

If those part filled years are post 2016 then in all likelihood they will add to your pension, pre 2016 years are unlikely to add value.

Post up your current amount up to April 2022 (or possibly still showing 2021), your number of pre 2016 years, number of post 2016 years, your COPE amount, your gap years and the tax year in which you reach SRA and people here will be able to work it all out for you.

Full year N.I. 80-17/18, short fall years 17/18,(237 to top up) 19/20,(126 top up) 21/22 (200 top up). COPE £160 as of April "22  . SRA 17/09/31. unlikely to have full year N.I. to 2031 due to health issues

Yes, well worth topping up those three years as together if made full they will add nearly £16 a week to your state pension.  

molerat

wiley353 said:

molerat said:

Sounds about right for a long public sector employment.

If those part filled years are post 2016 then in all likelihood they will add to your pension, pre 2016 years are unlikely to add value.

Post up your current amount up to April 2022 (or possibly still showing 2021), your number of pre 2016 years, number of post 2016 years, your COPE amount, your gap years and the tax year in which you reach SRA and people here will be able to work it all out for you.

Full year N.I. 80-17/18, short fall years 17/18,(237 to top up) 19/20,(126 top up) 21/22 (200 top up). COPE £160 as of April "22  . SRA 17/09/31. unlikely to have full year N.I. to 2031 due to health issues

At those prices it would be rude not to take advantage It will take you 22 weeks at today's rates to recoup the capital outlay

Are you currently receiving any benefits ?