Guide discussion: Voluntary national insurance contributions

Angp1967

My husband 68 claims pension and I 55 are living overseas.
I do not have full NI 
1983 to 1988 full payments
1988 to 1997 no payments 
1997 to 2010 full payments
2010 to present no payments 
Would it be worth me buying NI? or when I retire share husband's pension? Also should my husband die before I retire will we lose his pension?

molerat

Angp1967 said:

My husband 68 claims pension and I 55 are living overseas.
I do not have full NI 
1983 to 1988 full payments
1988 to 1997 no payments 
1997 to 2010 full payments
2010 to present no payments 
Would it be worth me buying NI? or when I retire share husband's pension? Also should my husband die before I retire will we lose his pension?

Poster's original thread here with some answers

 https://forums.moneysavingexpert.com/discussion/6399088/national-insurance-payments/p2

bones1958

Hi all,

Having read through this thread, lots of variations on basically the same theme depending on individual circumstances. Hopefully I have supplied sufficient info below to receive some sage advice as to what would be best for me in paying Voluntary NI contributions to try and attain the full State Pension amount.

So, here we go. A brief summary of my history.

45 full years contributions. Majority of these years I was Contracted Out. Employer contributions to a Final Salary Pension scheme.

41 years full employment with ‘Year Full’ recorded between Aug 1975 to TY 2016/2017.

I then took voluntary early retirement in Aug 2016 and monthly final salary pension (including 25% tax free lump sum).

From Aug 2016 to Apr 2018, I lived off my monthly pension. No NI paid.

However, I did have a single week’s employment in July 2017 and paid £99-56 NI for that week.

From 6th Apr 2018, I registered as self employed for a rental income being received for letting out my inherited parents flat. In that first tax year’s Self Assessment (2018 to 2019), I paid the relevant income tax BUT didn’t take advantage of paying Class 2 Self Employed NI.

Since then I have paid the SE Class 2 NI up to and including the latest full tax year 2021 to 2022.

Tax year 2022 to 2023 will effectively be my last Self Employed year. I have sold the property and it’s no longer rented out. When 22/23 SA is due, I intend paying Class 2 again as in recent years - depending on your sage advice.

Therefore, my questions are:-

1) Should, or do I need to, continue paying for 22/23 and if necessary for 23/24?

1. Can I go back and pay Class 2 NI for 2018/2019 by contacting HMRC?
2. Should, or can I, ignore the year that is asking for a one off payment of £695-40?
3. Will the fact I have paid Class 2 NI since that part year in 18/19 substitute the need to pay the lump sum in 3 above?

_________________________________________________________________________

My SP forecast is currently as follows:

State Pension on 11 September 2024

Your forecast is £169.45 a week,
£736.80 a month, £8,841.66 a year

global.important_legal_notice

Your State Pension forecast is provided for your information only and the service does not offer financial advice. When planning for your retirement, you should seek professional advice.

Your forecast

• is not a guarantee and is based on the current law
• does not include any increase due to inflation

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2022

£158.87 a week

Forecast if you contribute until 5 April 2024

£169.45 a week

You can improve your forecast

You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is

£174.74 a week

View gaps in your record and the costs of filling them.

Your forecast may be different if there are any changes to your National Insurance information. There is more about this in the terms and conditions.

You’ve been in a contracted-out pension scheme

Like most people, you were contracted out of part of the State Pension.

Putting off claiming

You can put off claiming your State Pension from 11 September 2024. 

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £88.69 a week

__________________________________________________________________________

National Insurance Record

• 45 years of full contributions
• 2 years to contribute before 5 April 2024
• 3 years when you did not contribute enough

View years only showing gaps in your contributions.

2022 to 2023

Your record for this year is not available yet

2021 to 2022

Year is not full

Hide

2021 to 2022

details

We are checking this year to see if it counts towards your pension. We’ll update your record when this is finished, you do not need to do anything.

2020 to 2021

Full year

View

2020 to 2021

details

2019 to 2020

Full year

View

2019 to 2020

details

2018 to 2019

Year is not full

Hide

2018 to 2019

details

We are checking this year to see if it counts towards your pension. We’ll update your record when this is finished, you do not need to do anything.

2017 to 2018

Year is not full

Hide

2017 to 2018

details

You have contributions from

Paid employment: £99.56

Find out more about gaps in your record and how to check them.

You can make up the shortfall

Pay a voluntary contribution of £697.40 by 5 April 2024. This shortfall may increase after 5 April 2023.

Find out more about voluntary contributions.

2016 to 2017

Full year

View

2016 to 2017

details

molerat

Your problem at the moment is the two "we are checking" years.

You currently have £158.87

2022-23-24 will add £10.58 bringing you to £169.45

It then goes on to say with previous gap years you can make up to £174.74 which is only one extra year.

I suspect those 2 "we are checking" years are being discounted from your maximum pension amount and when they are sorted they will add the necessary 2 more years which will take you to the full £185.15.

So you need to buy the one available not full post 2016 year plus the 2 going forward in any case and wait and see what happens to those 2 in question.

bones1958

Thanks Molerat.
The 21/22 “checking” year will be taken care off when I pay my Self Assessment in the coming weeks. I was holding off in case paying Class 2 wouldn’t assist in long run. Seems it will.

As for the 18/19 year, because I voluntarily or involuntarily?, didn’t pay Class 2 when I had the option to do so, can I contact HMRC to request that year be made “full”. If so that would take care of the 2 “we are checking years”.

For the year only part NI was paid (2017/2018) and the £697-40 voluntary contribution is indicated, If I’ve understood you right, I believe I have 2, maybe 3, options.
1) pay the £697-40 for that extra £5-29 per week on SP. (Pays for itself in 3years)
2) don’t pay it and end up with SP of just under £180pw.
3) Or - shot in the dark - per Martin’s article, I could possibly have obtained Job Seekers Allowance during that year but never claimed it. Would that work?

molerat

3) IMO is a no hoper.  You didn't claim it at the time so there is no chance.  To get that benefit you have to claim it but on a no payment basis and still jump through the job searching hoops.

I think you can pay the class 2 retrospectively for 18-19.

Easycruiser

I thank Martin for trying to clarify this complicated subject however unless others have a different experience from me it isn't worth his while.

I have contacted the number quoted - 0800 731 0469 - three times since February 2022 and on each occasion have been told that they cannot give me any information on what benefit I would gain by paying for the incomplete years. They said this was dealt with by another department which I cannot contact directly. They have apparently passed on my details to this other department three times now and I have received no reply.

I am anxious to find out if I am able to increase my pension by paying for the extra years but its not worth the anxiety it causes. I have now given up.

Dazed_and_C0nfused

Easycruiser said:

I thank Martin for trying to clarify this complicated subject however unless others have a different experience from me it isn't worth his while.

I have contacted the number quoted - 0800 731 0469 - three times since February 2022 and on each occasion have been told that they cannot give me any information on what benefit I would gain by paying for the incomplete years. They said this was dealt with by another department which I cannot contact directly. They have apparently passed on my details to this other department three times now and I have received no reply.

I am anxious to find out if I am able to increase my pension by paying for the extra years but its not worth the anxiety it causes. I have now given up.

Why not do what the rest of the country does and contact the (extremely helpful) Future Pension Centre.

They invariably get glowing reviews from posters on this forum.

https://www.gov.uk/future-pension-centre

molerat

Post up the full details of your pension forecast here and you will be told with 99.99% certainty of what you need to do.  It is not actually difficult to work out.

archnol1

Hi, I wonder if anyone can help. 

I am due to start receiving my state pension in 2028, when I am 67. I am currently 61 years old. I am fully paid up on National Insurance and according to my forecast on the Government website ( see below ) I only need to make NI contributions for a further 2 years, before 2028, in order to receive the full state pension of £185.15 per week.

I plan to continue to work part-time until I reach state pension age. I am paid through an Umbrella company and contribute to both Employee and Employer National Insurance, so a great deal of my outgoings go towards this. 

My question is this. Once I have contributed towards National Insurance for a further 2 years and reached the maximum amount required, in order to receive the full state pension of £185.15 per week, do I still have to carry on paying National Insurance for the next 4 years, until 2028?

Thank you

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2022

£179.82 a week

Forecast if you contribute another 2 years before 5 April 2028

£185.15 a week

£185.15 is the most you can get

You cannot improve your forecast any further, unless you choose to put off claiming.

If you’re working you may still need to pay National Insurance contributions until 11 May 2028 as they fund other state benefits and the NHS.