Guide discussion: Voluntary national insurance contributions

molerat

mad_mix said:

Thanks for clarifying that.

"10 + 6 + 5 = 21, the difference being down to a pre 2016 year adding £4.73, a post £5.29."

So I think you're saying essentially it may work out better for me to pay less than 10 years of pre-2016 and more post years at some time in the future as they add more.

I have done a rough and dirty calculation of both approaches and using 2023-24 prices for the forward years that works out about £400 cheaper for the 20 over the 21 years but that is without accounting for the future years increasing in price so with the 20 approach you would have the increase on an extra 5 years, especially relevant in these high inflation times, so it looks like in pure £ terms the current 21 could actually be cheaper.

mad_mix

That's very interesting.  To be honest, given the hassle involved in contacting HMRC, I think I'm just going to stick with the current plan and pay the 16 years of contributions.  Thanks again.

uk_nz_uk

Hi all,  Is there anyone who can help me understand the state pension forecast/voluntary contribution statements.  Just when I think I get it, read something else that confuses me even more. 

From September 2000 to July 2014 I was resident in New Zealand (which has a Bi-Lateral agreement with UK) and worked there from 2003 to Feb 2014.  Would any of the years worked overseas contribute to my final UK pension? Maybe as Class 2 voluntary contributions? 

How many of the shortfall years - pre 2016 or post 2016 - should I pay to get the maximum forecast pension of £185.15?

Thanks

You have:

26 years of full contributions

1 year to contribute before 5 April 2023

23 years where you did not contribute enough

Estimate based on your National Insurance record up top 5 April 2022  - £138.54

Forecast if you contribute until 5 April 2023 - £143.83

The most you can increase your forecast to is - £185.15

Your COPE estimate is - £12.93 a week

SHORTFALLS:

2021 to 2022  Year is not full  - Voluntary contribution  £800.80 by 5 April 2028

2020 to 2021  Year is not full  - Voluntary contribution  £795.60 by 5 April 2027

2019 to 2020  Year is not full  -  Voluntary contribution £824.20 by 5 April 2026

2018 to 2019  Year is not full  -  Voluntary contribution £824.20 by 5 April 2025

2017 back to 2007 no contributions made  - Voluntary contribution £824.20 per year

2006 back to 2000 no contributions made  - Too late to pay for these years

2000 back to 1976 - All Full years NI

Up to 1975 - Our records show you have 2 full years up to 5 Apr 1975

Started full time work in 1973

allicat

This is a really interesting thread, and it is fascinating how it is not a one case fits all scenario. No wonder so many people struggle with pensions - so thank you all for your help on explaining things.

I have a quick question that I think I know the answer to but just need to check.....

My state pension forecast as at Apr 22 is £182.25. My forecast if I contribute another year before 2032 is £185.15.

I have 37 years up to April 2022, and I reach retirement in Dec 2032. I am currently in full time work, and plan to continue for a few years.

I started contributing in 1981/82 and have 4 years where they are not full years with voluntary contributions of.

08/09 - £237.68

09/10 - £824.20

10/11 & 11/12 show year not full - no suggested contribution

I have COPE of £64.29

Is it worth me paying any of the missing years as they pre-2016?

Head says no, and then I start overthinking it.....

molerat

uk_nz_uk said:

Hi all,  Is there anyone who can help me understand the state pension forecast/voluntary contribution statements.  Just when I think I get it, read something else that confuses me even more. 

From September 2000 to July 2014 I was resident in New Zealand (which has a Bi-Lateral agreement with UK) and worked there from 2003 to Feb 2014.  Would any of the years worked overseas contribute to my final UK pension? Maybe as Class 2 voluntary contributions? 

How many of the shortfall years - pre 2016 or post 2016 - should I pay to get the maximum forecast pension of £185.15?

Thanks

You have:

26 years of full contributions

1 year to contribute before 5 April 2023

23 years where you did not contribute enough

Estimate based on your National Insurance record up top 5 April 2022  - £138.54

Forecast if you contribute until 5 April 2023 - £143.83

The most you can increase your forecast to is - £185.15

Your COPE estimate is - £12.93 a week

SHORTFALLS:

2021 to 2022  Year is not full  - Voluntary contribution  £800.80 by 5 April 2028

2020 to 2021  Year is not full  - Voluntary contribution  £795.60 by 5 April 2027

2019 to 2020  Year is not full  -  Voluntary contribution £824.20 by 5 April 2026

2018 to 2019  Year is not full  -  Voluntary contribution £824.20 by 5 April 2025

2017 back to 2007 no contributions made  - Voluntary contribution £824.20 per year

2006 back to 2000 no contributions made  - Too late to pay for these years

2000 back to 1976 - All Full years NI

Up to 1975 - Our records show you have 2 full years up to 5 Apr 1975

Started full time work in 1973

You are £46.61 short of the full amount which needs 9 years to fill.  You can only fill a maximum of 4 pre 2016 years, you are limited to 30.  The optimum for you is 2 pre 2016 years and 7 post 2016, including 2022-23, to reach £185.03 leaving you 12p short of the max. The more pre 2016 years you fill the bigger the gap from the max gets at 56p per year.  I think you should be eligible for class 2 for 4 early years but you would need to phone up and check.  If you are then 4 pre and 5 post would leave a greater shortfall, £1.24, but at a much lower cost.

To check if your NZ employment has any bearing on your UK pension you need to speak to the UK IPC https://www.mfat.govt.nz/en/countries-and-regions/europe/united-kingdom/new-zealand-high-commission/living-in-the-uk/social-security-agreement/  The big problem is that we are very close to the cut off point and the wheels of officialdom turn very slowly.

molerat

allicat said:

This is a really interesting thread, and it is fascinating how it is not a one case fits all scenario. No wonder so many people struggle with pensions - so thank you all for your help on explaining things.

I have a quick question that I think I know the answer to but just need to check.....

My state pension forecast as at Apr 22 is £182.25. My forecast if I contribute another year before 2032 is £185.15.

I have 37 years up to April 2022, and I reach retirement in Dec 2032. I am currently in full time work, and plan to continue for a few years.

I started contributing in 1981/82 and have 4 years where they are not full years with voluntary contributions of.

08/09 - £237.68

09/10 - £824.20

10/11 & 11/12 show year not full - no suggested contribution

I have COPE of £64.29

Is it worth me paying any of the missing years as they pre-2016?

Head says no, and then I start overthinking it.....

No point in paying to fill the gap which 2022-23 is going to fill anyway especially and it is only giving you an extra £2.90

allicat

molerat said:

allicat said:

This is a really interesting thread, and it is fascinating how it is not a one case fits all scenario. No wonder so many people struggle with pensions - so thank you all for your help on explaining things.

I have a quick question that I think I know the answer to but just need to check.....

My state pension forecast as at Apr 22 is £182.25. My forecast if I contribute another year before 2032 is £185.15.

I have 37 years up to April 2022, and I reach retirement in Dec 2032. I am currently in full time work, and plan to continue for a few years.

I started contributing in 1981/82 and have 4 years where they are not full years with voluntary contributions of.

08/09 - £237.68

09/10 - £824.20

10/11 & 11/12 show year not full - no suggested contribution

I have COPE of £64.29

Is it worth me paying any of the missing years as they pre-2016?

Head says no, and then I start overthinking it.....

No point in paying to fill the gap which 2022-23 is going to fill anyway especially and it is only giving you an extra £2.90

I knew I shouldn't try and overthink things! Thanks @molerat

Strummer22

I'm sure this has been raised already so apologies, but I haven't found this exact question yet.

My wife wants to pay one year of voluntary class 3 NI. The amount isn't relevant but it'll cost less than £16.

How does she actually manage to pay? On https://www.gov.uk/pay-voluntary-class-3-national-insurance it says 'pay now' but then asks you for your Class 3 National Insurance reference number, saying "this is 18 characters and begins with 60. For example 603490017829614130. You’ll find it on your bill."

Can you only obtain this bill/number by phoning HMRC and sitting on hold for several days? Well, hours, but it feels like days....

molerat

Strummer22 said:

I'm sure this has been raised already so apologies, but I haven't found this exact question yet.

My wife wants to pay one year of voluntary class 3 NI. The amount isn't relevant but it'll cost less than £16.

How does she actually manage to pay? On https://www.gov.uk/pay-voluntary-class-3-national-insurance it says 'pay now' but then asks you for your Class 3 National Insurance reference number, saying "this is 18 characters and begins with 60. For example 603490017829614130. You’ll find it on your bill."

Can you only obtain this bill/number by phoning HMRC and sitting on hold for several days? Well, hours, but it feels like days....

Yes.

But there are other ways to pay.

Which year is it for ?

Strummer22

molerat said:

Strummer22 said:

I'm sure this has been raised already so apologies, but I haven't found this exact question yet.

My wife wants to pay one year of voluntary class 3 NI. The amount isn't relevant but it'll cost less than £16.

How does she actually manage to pay? On https://www.gov.uk/pay-voluntary-class-3-national-insurance it says 'pay now' but then asks you for your Class 3 National Insurance reference number, saying "this is 18 characters and begins with 60. For example 603490017829614130. You’ll find it on your bill."

Can you only obtain this bill/number by phoning HMRC and sitting on hold for several days? Well, hours, but it feels like days....

Yes.

But there are other ways to pay.

Which year is it for ?

Thanks. I can't recall which year but it's within the last 6 years.

Do any of the other ways to pay avoid having to phone HMRC?