Guide discussion: Voluntary national insurance contributions

Rod1883

Thank you pinnks and p00hsticks.
I've just been on the phone to the Future Pensions people (only 40 minute wait on hold so not too bad) and they confirmed that it's not worth topping up pre 2016/17 years as I'm already at max pension on the old scheme for those years.
The very helpful chap confirmed that 8 years top up would get me to the max £185.15 pw pension (I have 6 years available to top up now from 16/17 to 21/22 inc) and confirmed the number to call to do that is as given by pinnks above. He also explained that when I call HMRC to pay - I can confirm the years I wish to pay, and the 18 digit reference number I get given will then be for all those years agreed - hope that makes sense for anyone reading this.
He also confirmed that the top up cost for years 17/18 to 20/21 inclusive will go up on 6th April this year, and that future years will become more expensive to top up too.

SiliconChip

p00hsticks said:

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.

I came here because you mentioned on another board that HMRC are currently processing queries from last September. If so then a query made today about 2016/7 would not be answered until the opportunity to purchase that year has ended. That can't be acceptable, so surely they ought to extend the purchase availability until all queries have been dealt with. [Note that this doesn't apply to me, I already have a full year for 2016/7, but it may apply to my sister who is waiting for a response to a query she made in January]

p00hsticks

SiliconChip said:

p00hsticks said:

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.

I came here because you mentioned on another board that HMRC are currently processing queries from last September. If so then a query made today about 2016/7 would not be answered until the opportunity to purchase that year has ended. That can't be acceptable, so surely they ought to extend the purchase availability until all queries have been dealt with. [Note that this doesn't apply to me, I already have a full year for 2016/7, but it may apply to my sister who is waiting for a response to a query she made in January]

My understanding is that if you send a cheque to make voluntary contributions that it is received before the April deadline, then it will be accepted and processed. But I don't believe they will extend the deadline until all queries have been processed. For a start, they're never goingto get to a point where they can say that, and also people have had plenty of time (six years plus) to get it all sorted with a well publicised deadline, so can't really complain (although I'm sure they will) if they've left it until the last minute to deal with. 

pinnks

p00hsticks - thanks for correcting my oversight re 2016/17 going out of date.  You are of course totally correct.

Re delays/applications not being dealt with before the deadline, HMRC said on their customer forum, albeit in the context of a person living abroad worrying about the deadline, that "We can consider payment of voluntary National Insurance contributions as far back as 2006 to 2007 tax year but your application form would need to be received by us before 5 April 2023 to be considered that far back. If we receive the application form after 6 April 2023 we can consider payment of voluntary National Insurance contributions from 2017 to 2018 onwards." 

SiliconChip

p00hsticks said:

SiliconChip said:

p00hsticks said:

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.

I came here because you mentioned on another board that HMRC are currently processing queries from last September. If so then a query made today about 2016/7 would not be answered until the opportunity to purchase that year has ended. That can't be acceptable, so surely they ought to extend the purchase availability until all queries have been dealt with. [Note that this doesn't apply to me, I already have a full year for 2016/7, but it may apply to my sister who is waiting for a response to a query she made in January]

My understanding is that if you send a cheque to make voluntary contributions that it is received before the April deadline, then it will be accepted and processed. But I don't believe they will extend the deadline until all queries have been processed. For a start, they're never goingto get to a point where they can say that, and also people have had plenty of time (six years plus) to get it all sorted with a well publicised deadline, so can't really complain (although I'm sure they will) if they've left it until the last minute to deal with. 

So if you buy the 2016/7 year in order to beat the deadline but your unanswered query is whether you need to buy them or not, and the eventual answer is that you don't need to, will they cancel the purchase and refund the payment?

And they absolutely could get to a point where all queries up to a cut off date have been answered, but if their only cut off is the date for making the purchase then they can't use their failure to provide enough resources to answer questions received as a reason to deny the purchase at a later date (although I'm sure that's exactly what will happen in practice).

pinnks

The question of whether it is beneficial to pay a particular year is one for DWP Future Pensions and HMRC will ask you to confirm that you have had that discussion before talking about how to pay.  The holding open of the payment deadline is for those who have engaged with HMRC about payment.  But they need to have had the discussion with DWP first.

Rod1883

Further to my earlier post today, I've had another thought/question that I wish I'd thought to ask when speaking to the Future Pensions chap this morning.
I'm clear that making a full year NIC contribution currently 'buys' £5.29pw, £275pa pension and one can make extra contributions to a max pension of £185.15pw.
I'm wondering though are these pension figures fixed or will they increase with cost of living rises applied to pensions in future? Effectively is it the case that the £5.29pw I might buy today could be ~£6pw in a couple of years time, thus making it even more attractive?
Thanks again for any answers...

p00hsticks

Rod1883 said:

Further to my earlier post today, I've had another thought/question that I wish I'd thought to ask when speaking to the Future Pensions chap this morning.
I'm clear that making a full year NIC contribution currently 'buys' £5.29pw, £275pa pension and one can make extra contributions to a max pension of £185.15pw.
I'm wondering though are these pension figures fixed or will they increase with cost of living rises applied to pensions in future? Effectively is it the case that the £5.29pw I might buy today could be ~£6pw in a couple of years time, thus making it even more attractive?
Thanks again for any answers...

Yes, they do increase - basically each post-2016 year is worth 1/35th of the maximum amount. So this year a year represents £5.29, but next year its value will increase by around 10% as the maximum increases.

p00hsticks

SiliconChip said:

p00hsticks said:

SiliconChip said:

p00hsticks said:

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.

I came here because you mentioned on another board that HMRC are currently processing queries from last September. If so then a query made today about 2016/7 would not be answered until the opportunity to purchase that year has ended. That can't be acceptable, so surely they ought to extend the purchase availability until all queries have been dealt with. [Note that this doesn't apply to me, I already have a full year for 2016/7, but it may apply to my sister who is waiting for a response to a query she made in January]

My understanding is that if you send a cheque to make voluntary contributions that it is received before the April deadline, then it will be accepted and processed. But I don't believe they will extend the deadline until all queries have been processed. For a start, they're never goingto get to a point where they can say that, and also people have had plenty of time (six years plus) to get it all sorted with a well publicised deadline, so can't really complain (although I'm sure they will) if they've left it until the last minute to deal with. 

So if you buy the 2016/7 year in order to beat the deadline but your unanswered query is whether you need to buy them or not, and the eventual answer is that you don't need to, will they cancel the purchase and refund the payment?

And they absolutely could get to a point where all queries up to a cut off date have been answered, but if their only cut off is the date for making the purchase then they can't use their failure to provide enough resources to answer questions received as a reason to deny the purchase at a later date (although I'm sure that's exactly what will happen in practice).

As pinkks has pointed out, HMRC are not going to give any advice on whether it;s going to be beneficial to buy a NI year or not - that's a job for DWP - either the Future Pension Centre or (if already over state Pension age) the Pension Service.

HMRC can only simply confirm if the year is or is not full and how much it will cost to fill it.

Both the Future Centre Pension Centre and the HMRC NI Enquiries depatments are contactable by phone or textphone, although as the deadline approaches wait times to get through appear to be increasing exponentially. 

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

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-employees-and-individuals

Also, if someone can post details of their NI record and State Pension forecast on this forum, in most cases people can give information on which years (if any) would improve their forecast.

So, playing devils advocate, is there any reason why your sister has not queried long before now whether 2016/17 years would be beneficial to her forecast, and, having left it this late in the day, has opted to communicate by post rather than phone ?

cmdsea

So.. another day has passed and I have again made multiple phone calls to the Future Pension Centre... all to no avail as they immediately disconnect once I have gone through multiple menu selections attempting to reach a human... Frustrating, especially as this is not a free call when made from overseas.

Long story short. I am 57 years old. I left the UK in 1993 and have lived and worked in Singapore since then. I can see my NI history online and it shows I have 8 years of contributions on my record and 16 years are currently available for voluntary contributions from 2006/7 to 2021/22 inclusive at a cost of GB13,135 and with a retirement date in 2032 I believe I still have 10 future years so I should be able to accrue a total of 34 years....

Thinking its a no brainer to proceed with this and completely unable to reach the Future Pension Centre, I instead called the HMRC hotline to request an 18 digit payment code, only to be told that as I live overseas I instead need to print out and post a CF83 "Application to pay National Insurance contribution from abroad". 

I am hoping the collective wisdom in here can help me with the following two queries.

1) Am I correct to think it is indeed a no brainer to proceed with this (i have no known health issues..) or are there any Gotcha's to this that I am blissfully ignorant of so far...

2) If I am correct to proceed. The CF83 gives me the choice to pay either class 2 or class 3 contributions. The class 3 contributions are 5x the cost of class 2... If I opt to pay class 2 contributions for the missing years does anyone know if that still generates the same pension entitlement.

Thank you for any enlightenment.! 

Jon