Guide discussion: Voluntary national insurance contributions

robbybobs

Thank you very much molerat. Will the fact that I will not live in the UK make any difference?

p00hsticks

robbybobs said:

Thank you very much molerat. Will the fact that I will not live in the UK make any difference?

have a read of this

https://www.gov.uk/government/publications/social-security-abroad-ni38

particularly the section on 'paying voluntary national insurance contributions while you're abroad'

Brox2010

Hi, any chance I could get some opinions as to whether it's worth it for me to boost my contributions? I turned 18/left school in 2005, but a combination of living abroad and degrees meant that I only contributed 1 full year (2010-2011) prior to 2016.

My forecast is £185/week from 2055 assuming I contribute another 25 years (so continue contributing yearly until I'm 61).

I have the option of making voluntary contributions on 9 of the unfilled years between 2006 and 2016. However I can't figure out if it's worth it? If I did make the contributions but continued working in the UK till I retired at some point in my 60s, am I right in assuming I effectively contributed extra years I didn't need to?

p00hsticks

Yes, if you're intending on working for those 25 years going forwards, I'd say that there is no point in going back to fill in past gaps now, it would just be a waste of money.

robbybobs

Thanks p00hsticks!

NeilSaunders

I have today requested from the Pension Service confirmation on how many years I can voluntarily contribute (I think 8) to be told that I will get a reply within 6 weeks which is close to the 05 April cut-off date. A question I have if you have deferred taking the pension (in my case for 5 years) and make the voluntary contributions then presumably the uplift from deferral is calculated on the
increase from the additional voluntary contributions.
I do wish that there was the facility to 'pay-ahead' of the number of available voluntary years 

molerat

NeilSaunders said:

I have today requested from the Pension Service confirmation on how many years I can voluntarily contribute (I think 8) to be told that I will get a reply within 6 weeks which is close to the 05 April cut-off date. A question I have if you have deferred taking the pension (in my case for 5 years) and make the voluntary contributions then presumably the uplift from deferral is calculated on the
increase from the additional voluntary contributions.
I do wish that there was the facility to 'pay-ahead' of the number of available voluntary years 

Quite a complex one I expect calculating the uplift when in deferral.  The additional years will take effect from the date of payment so I suspect the calculation will be done in 2 parts, one from original deferral and one from date of payment.  It should not be too difficult to work out which years will make a difference if you know the amount you would have received at pension age, the number of pre 2016 years held and the number of post 2016 years held, a COPE amount if known would add certainty to pre 2016 additions.

Rod1883

Late to this - it took HMRC 8 months to correct an error in my Gateway sign in so I've only been able to get into all my data today.
In a nutshell, I have 35 years full NI contributions up to and including year 2012-13 (when I was made redundant), i.e. all before 2016-17 when the rules changed. I was contracted out for a large portion of my working life and have a COPE of £95.18pw. My current Pension estimate based on contributions made is £142.90pw. I have a partial contribution year in 2013/14, but haven't worked or contributed NI since then.
I reach pension age (66) in June 2025.
Based on my understanding of the great info on this thread it would seem pointless making any payment for any year before 2016/17 - is this correct?
I probably should pay some extra for some or all years from 2016/17, especially the two most recent before the cost of those goes up.
How do you specify which year or years you are paying when a payment is made - or is the reference number provided by the pension people year specific?
I'm going to try to call the Future pension helpline tomorrow but I would welcome expert opinion from here.
Thanks.

pinnks

I think that is correct re pre-2016/17 as you already had 35 years and, with such a high COPE I would assume your starting amount for the new rules is based on the old rules calculation.  That in turn is based on a max of 30 years.  As you have a forecast of £142.90 and have not paid any NI for 2016/17 onwards, it seems you would have a £1 or so of additional pension tucked away in that £142. 

All years go up in April apart from 2021/22 and 2022/23, so if you do decide to pay 2016/17 onwards you will save 10.1% on 2016/17 to 2019/20 payments.

Each year adds £5.29 per week to your starting amount, which I am pretty sure is £142.90, so buying all years, 2016/17 to 2023/24 would add 8 x £5.29 = £42.32 to that £142.90, which takes you to the max.

Edit: when you decide to pay, you call HMRC NIC on 0300 200 3500 and can specify the year(s) you want to pay.  I did that today, re 2020/21.

Have a chat with DWP Future Pensions to confirm that and then decide.

p00hsticks

pinnks said:

All years go up in April apart from 2021/22 and 2022/23, so if you do decide to pay 2016/17 onwards you will save 10.1% on 2016/17 to 2019/20 payments.

2016/17 won't be available to buy at all after April - the temporary extension to the years you can buy finishes then and it reverts to only being able to buy the six previous years - so only 2017-18 onwards.