Guide discussion: Voluntary national insurance contributions

Rogue_Gryphon

As a newbie here I've found the various comments extremely useful and helpful. However I still find some of it a bit hard to get my head around. I'm due to claim my pension next month. I was contracted out though didn't realise the consequences. I have 37 full years and 11 incomplete, a COPE estimate of £63.35/wk  and a forecast of £166.53/wk. I can increase it to the max if I purchase the last 4 years. I stopped working in 2017 - so am I right that these years need to be post 2016? I do have 2 years pre-2016 which are incomplete but from this forum it appears buying these years will not help? I have also found that my NI record shows an error for 2004 when I was in full time work but it says no payment received. Is this likely to affect the COPE and my forecast and is it worth challenging? I too am waiting to get through to the Future Pension Centre.

molerat

With that size of COPE your starting amount will be based on the old rules with 30 years max useable so pre 2016 years cannot add to your pension.

COPE could possibly only be affected by that missing year if you were contracted out at the time which could increase the COPE but that would be of no consequence to your forecast.  The missing year would not have any effect on the basic pre 2016 pension amount as you are limited to 30 useable years under the old rules but there is the possibility that it may have some S2P attached which could increase your starting amount and current pension but would it be enough to totally discount the 4th year which only gives you £2.75, not certain if it could increase the pre 2016 contracted out deduction.  The missing year would need to be queried with HMRC NI helpline and they should be able to tell you what they think you were doing that year, FPC only deal with the pension side.

Rogue_Gryphon

Thanks molerat. Got through to Future Pensions earlier - only a 50 minute wait. They confirmed nothing pre-2016 would help and I would need 4 years to get the full pension.

jaymag14

Hi.  Thank you for this.  Having previously plugged some gaps in my NI years, my record now shows 35 full years.  Reading your guide I realised this may not be enough so I followed your link to my pension forecast which happily shows a prediction of the full pension.  Under the pension forecast, though, the wording implies that I may still have to work and get more years under my belt to qualify, if not for the pension but for other things.  As I am retired now (age 60) my questions are:-

1. Could my pension forecast subsequently become less than 'full' if I do not make any more NI contributions ie do I have to keep checking, and maybe topping up?

2. What are the other things that may be effected by not making further NI contributions, even if the full pension is now guaranteed?

molerat

1.  No.  If there is only one figure on your forecast then nothing can change that.

2.  Nothing is affected by not paying voluntary contributions.  Class 1 contributions, generally from employment, give access to some benefits.

Dazed_and_C0nfused

Why don't you just post your forecast (in full).

Then you will get a definitive answer.

lon_don

Hello. Thank you all for this very informative thread. I have a couple questions if you can help:

My wife arrived in UK as EU national and has been working and paying NI since 2009-10.

Her forecast says

You can get your State Pension on dd mm 2041

Your forecast is £179.86 a week, £782.07 a month, £9,384.84 a year

You have:

• 16 years of full contributions
• 18 years to contribute before 5 April 2040
• 3 years when you did not contribute enough

2022 to 2023

Your record for this year is not available yet

2021 to 2022

Full year

2020 to 2021

Full year

2019 to 2020

Full year

2018 to 2019

Full year

2017 to 2018

Full year

2016 to 2017

Full year

2015 to 2016

Full year

2014 to 2015

Full year

2013 to 2014

Full year

2012 to 2013

Full year

2011 to 2012

Full year

2010 to 2011

Full year

2009 to 2010

Full year

2008 to 2009

Year is not full

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.

2007 to 2008

Year is not full

You did not make any contributions this year
You can make up the shortfall
Pay a voluntary contribution of £824.20 by 5 April 2023. This shortfall may increase after 5 April 2023.

2006 to 2007

Year is not full

You did not make any contributions this year
You can make up the shortfall
Pay a voluntary contribution of £824.20 by 5 April 2023. This shortfall may increase after 5 April 2023.

- Is she correct to think that the most optimal purchase is for 1 missing year (either 2006-07 or 2007-08, not sure what's up with 2008-09) to get an extra £5.29 pw which will bring her to (exactly) £185.15 pw from £179.86 ?

- Hypothetically, will she still get the same £185.15 pw if she keeps working another extra year ie until dd mm 2042 before retiring, all else being equal ?

- Is she even entitled to purchase missing NI from 2006 as she didn't start working in UK before April 2009 ? She did work in her (EU) home country before arriving in UK in late 2006.

- Assuming she has made up her mind to purchase NI, she has to call HMRC or FPC to get her 18 digit [Class 3] National Insurance reference number ? Or can this number be found on her HMRC gov.uk account ?

Thank you.

GSP

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £73.73 a week

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

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

£165.58 a week

Forecast if you contribute another 4 years before 5 April 2029

£185.15 a week

£185.15 is the most you can get

So apart from paying 4 years, do I have anything else to worry about? Is the COPE figure just for ‘information purposes’?
Thank you.

p00hsticks

Is the COPE figure just for ‘information purposes’?

yes (or to be precise, it was used in the calculation of your entitlement under the new rules as at 6/4/2016, which, if higher than the equivalent calculation under the old rules, would have become your 'starting amount' at that date. After that it's for information purposes only.)

molerat

lon_don said:

Hello. Thank you all for this very informative thread. I have a couple questions if you can help:

My wife arrived in UK as EU national and has been working and paying NI since 2009-10.

Her forecast says

You can get your State Pension on dd mm 2041

Your forecast is £179.86 a week, £782.07 a month, £9,384.84 a year

You have:

• 16 years of full contributions
• 18 years to contribute before 5 April 2040
• 3 years when you did not contribute enough

2022 to 2023

Your record for this year is not available yet

2021 to 2022

Full year

2020 to 2021

Full year

2019 to 2020

Full year

2018 to 2019

Full year

2017 to 2018

Full year

2016 to 2017

Full year

2015 to 2016

Full year

2014 to 2015

Full year

2013 to 2014

Full year

2012 to 2013

Full year

2011 to 2012

Full year

2010 to 2011

Full year

2009 to 2010

Full year

2008 to 2009

Year is not full

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.

2007 to 2008

Year is not full

You did not make any contributions this year
You can make up the shortfall
Pay a voluntary contribution of £824.20 by 5 April 2023. This shortfall may increase after 5 April 2023.

2006 to 2007

Year is not full

You did not make any contributions this year
You can make up the shortfall
Pay a voluntary contribution of £824.20 by 5 April 2023. This shortfall may increase after 5 April 2023.

- Is she correct to think that the most optimal purchase is for 1 missing year (either 2006-07 or 2007-08, not sure what's up with 2008-09) to get an extra £5.29 pw which will bring her to (exactly) £185.15 pw from £179.86 ?

- Hypothetically, will she still get the same £185.15 pw if she keeps working another extra year ie until dd mm 2042 before retiring, all else being equal ?

- Is she even entitled to purchase missing NI from 2006 as she didn't start working in UK before April 2009 ? She did work in her (EU) home country before arriving in UK in late 2006.

- Assuming she has made up her mind to purchase NI, she has to call HMRC or FPC to get her 18 digit [Class 3] National Insurance reference number ? Or can this number be found on her HMRC gov.uk account ?

Thank you.

She needs one more year on top of what she can get going forward.  She cannot  make the full amount with years going forward, she cannot contribute beyond April 2041. She can purchase any years where she was legally resident in the UK.

She needs to phone HMRC for the reference number or could write a letter enclosing a cheque. https://www.gov.uk/pay-voluntary-class-3-national-insurance