Guide discussion: Voluntary national insurance contributions

molerat

cllrknight100 said:

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

If they are gap years before you reached SP age then yes as long as they are no more than 6 years old.

cllrknight100

So this means you can't purchase years after you have claimed the state pension?

Dazed_and_C0nfused

cllrknight100 said:

So this means you can't purchase years after you have claimed the state pension?

It depends exactly what you mean 

You cannot pay for the tax year you reach State Pension age in or any years after that.

Or do you mean after you reach SPA can you belatedly pay for years that were before the year you reach SPA?

jem16

cllrknight100 said:

So this means you can't purchase years after you have claimed the state pension?

As molerat says you can purchase gaps in your NI record up to reaching SPA and you can do this even after claiming your state pension.

What you cannot do is purchase years after your SPA.

itsmeagain

There a few other relevant things (not sure if they have been mentioned and the accuracy).

If you've run out of time to get full state pension, (say 2 years short), can you delay your state pension for 2 years to buy the next 2?

With pension reforms, many retire early these days (which causes a shortage). Worth mentioning that if you look after grandkids (because son/daughter went back to work), you can get your children's freebie years past over to you.

It appears you can also do a small hobby business in early retirement (even the less than £1000 tax free traders allowance) and pay £3.05 per week voluntary class 2 = £158.6 per year before you reach state pension age (instead of paying £800). 

If you are short of years due to 'contract out', can you 'top up' to the same amount that you should have paid for 'opt-in'?

If you were self employed and didn't earn enough to mandate NI (but you could have paid voluntary class 2 at the time), can you pay the voluntary class 2 for those years that you previously chose not to pay?

RFB_2

It would be helpful if the guide linked to the existing MSE guide for claiming the Grandparents transfer of NI credits for childcare

I was able to get several years of extra NI credit using this little known benefit and I was also refunded for having already bought those additional years.

Purchasing extra NI years has a much better return on investment than any savings account (providing you don't die too soon)

p00hsticks

itsmeagain said:

If you've run out of time to get full state pension, (say 2 years short), can you delay your state pension for 2 years to buy the next 2?

No - only years up to the last complete tax year prior to you reaching State Pension Age will add years to your Pension calculation.

Deferring State Pension will result in an eventual increased state pension amount ,but only because you are deferring claiming it.

itsmeagain said:

If you are short of years due to 'contract out', can you 'top up' to the same amount that you should have paid for 'opt-in'?

No - years are classed as 'full' if you have 52 weeks contributions, whether they are credits , contacted out or contracted in. 

 

itsmeagain

p00hsticks said:

itsmeagain said:

If you've run out of time to get full state pension, (say 2 years short), can you delay your state pension for 2 years to buy the next 2?

No - only years up to the last complete tax year prior to you reaching State Pension Age will add years to your Pension calculation.

Deferring State Pension will result in an eventual increased state pension amount ,but only because you are deferring claiming it.

Ta. So if you reached the min state pension age and deferred taking your pension (because you decided to carry on working), do the HMRC stop taking NI contributions, or do you still have to still pay it without getting a years stamp for your contibution?

Update - just found the rules and it says that if you are self employed, you have to pay NI for the whole year that you reach state pension age.

If you are correct, you could reach SPA in April, and have to pay the remaining years NI without getting anything for that year - ouch!

Dazed_and_C0nfused

itsmeagain said:

p00hsticks said:

itsmeagain said:

If you've run out of time to get full state pension, (say 2 years short), can you delay your state pension for 2 years to buy the next 2?

No - only years up to the last complete tax year prior to you reaching State Pension Age will add years to your Pension calculation.

Deferring State Pension will result in an eventual increased state pension amount ,but only because you are deferring claiming it.

Ta. So if you reached the min state pension age and deferred taking your pension (because you decided to carry on working), do the HMRC stop taking NI contributions, or do you still have to still pay it without getting a years stamp for your contibution?

Update - just found the rules and it says that if you are self employed, you have to pay NI for the whole year that you reach state pension age.

If you are correct, you could reach SPA in April, and have to pay the remaining years NI without getting anything for that year - ouch!

That is only Class 4 NI, where there is a decent(ish) lower threshold.

You don't have to pay Class 2 NI.

itsmeagain

Dazed_and_C0nfused said:

itsmeagain said:

p00hsticks said:

itsmeagain said:

If you've run out of time to get full state pension, (say 2 years short), can you delay your state pension for 2 years to buy the next 2?

No - only years up to the last complete tax year prior to you reaching State Pension Age will add years to your Pension calculation.

Deferring State Pension will result in an eventual increased state pension amount ,but only because you are deferring claiming it.

Ta. So if you reached the min state pension age and deferred taking your pension (because you decided to carry on working), do the HMRC stop taking NI contributions, or do you still have to still pay it without getting a years stamp for your contibution?

Update - just found the rules and it says that if you are self employed, you have to pay NI for the whole year that you reach state pension age.

If you are correct, you could reach SPA in April, and have to pay the remaining years NI without getting anything for that year - ouch!

That is only Class 4 NI, where there is a decent(ish) lower threshold.

You don't have to pay Class 2 NI.

Thanks - but that wasn't the question. We were talking about delaying state pension for a year or so to gain an extra year stamp. It was relating to the comment..  "No - only years up to the last complete tax year prior to you reaching State Pension Age will add years to your Pension calculation"

So, does that mean that you may have to pay class 4 NI for the year you reach SPA but get nothing for it because it was being paid 'during' the year you reached state pension age, not 'prior' to reaching?