Guide discussion: Voluntary national insurance contributions

Zuperzenon

The final answer in the Q&A appears to be incorrect. If you live and work abroad Class 2 contributions are applicable, but if you live abroad and do not work then contributions are at the much higher Class 3 rates.

p00hsticks

staggered said:

As others have said, you need to take account of "opting out".  I was opted out for 2 years, when I worked for a previous employer.  I had no idea I'd done that and had to have it explained to me why I had 24 years of contributions but still needed to make another 13 years contributions to receive a full pension.

Being pedantic, in this context when talking about the pre-2016 State Pension, the term is 'contracting out' - i.e.paying a lower rate of National Insurance, usually because your employer is providing some sort of pension scheme of their own. The alternative was to be 'contracted in' and pay a higher rate of NI in order to earn some additional 'top up' State Pension (SERPS or S2P). Contracting in and out was done away with as part of the introduction of the new State Pension in 2016 in order to simplify the system. As you say, in many cases the employee didn't have the option as to whether they were contracted in or out, and often even weren't aware of the difference.  .  

'opting out' is still possible, and is when someone chooses not to belong to the private pension scheme that employers now have to offer. . 

MSE_Clare

Zuperzenon said:

The final answer in the Q&A appears to be incorrect. If you live and work abroad Class 2 contributions are applicable, but if you live abroad and do not work then contributions are at the much higher Class 3 rates.

Thanks for pointing this out. We've updated the guide to reflect this.

markybaby2

Hi All,
Going through Govt Gateway presents its own problems, but I'll get there!
My question is, can I pay VNI contributions for myself (early retirement at 57), until my state pension age?
Also, can my wife pay extra NI contributions until state pension age, despite probably taking early retirement as well?
Both have NHS Superann pensions.

Many thanks in advance.  

molerat

markybaby2 said:

Hi All,
Going through Govt Gateway presents its own problems, but I'll get there!
My question is, can I pay VNI contributions for myself (early retirement at 57), until my state pension age?
Also, can my wife pay extra NI contributions until state pension age, despite probably taking early retirement as well?
Both have NHS Superann pensions.

Many thanks in advance.  

Yes you can.  Obviously you need to access your pension forecast to see what you already have.

gaggyball

I have a reference number from HMRC and their bank details from a couple of years ago when I topped up a qualifying year on my wife's NI record. Do I need to contact them each time for a reference number or can I use this one? Secondly, do you have to say which year(s) you are topping up?

gaggyball

staggered said:

I've paid voluntary contributions for a number of years.  I did some calculations and, like the guide says, worked out that I'd only need to live for about 3 years after retirement age to earn that money back.

As others have said, you need to take account of "opting out".  I was opted out for 2 years, when I worked for a previous employer.  I had no idea I'd done that and had to have it explained to me why I had 24 years of contributions but still needed to make another 13 years contributions to receive a full pension.

Another observation is that the process for paying voluntary contributions (unless it's improved recently) is horribly slow and inefficient.  I rang HMRC to tell them that I wanted to make a contribution, clutching my bank card, expecting to be able to pay HMRC over the phone, like any other 21st century business.  Instead, I was given a bank account number, a 16-digit reference number, and told to make a payment via online banking quoting this 16-digit reference number. 

I was worried that I might have got one of the 16 digits wrong so rang HMRC to ask if they'd received the payment, only to be told that they didn't know, because their system didn't tell them, but that I should check back every few weeks to see if my account had been updated.  I think it took about 6 weeks for it to finally show on my statement.

I think that, if there's an option for the reference number to be sent in the post, that would be better as at least that way you'll be able to double-check you've entered it correctly.

Yes. I didn't know if the payment went through correctly until they updated my wife's NI record at the end of the tax year. Fortunately, I only needed to pay a small amount to complete the full NI tax year so I wasn't overly worried.

Misslayed

p00hsticks said:

Where can we find this guide ?

A link to it would be helpful .....

Click on the blue words in the first sentence - it's the link you need

cllrknight100

MSE_Clare said:

This is the place to discuss our new guide on voluntary national insurance contributions.

We'd love to hear your thoughts, personal experiences, and general feedback. 

If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.'

Does this mean that you can purchase extra years even after claiming your state pension?

cllrknight100

Does this mean you can purchase extra years even after claiming your state pension?