Guide discussion: Voluntary national insurance contributions

Rogerrabbit777

A thank you to MSE for helping to make people aware of this situation and the loss of years that zero hrs/part time workers face (something that i never knew or was made aware of even though HMRC knew i was one of those workers)and members of the forum for their advice.After getting a forecast,today i have been able to buy three years for the price of one to get me to the “magic” year ten something that makes me feel alittle better as before i was totally unaware.Thankfully i have the money there to pay for it and its put me in a slighly better position than i was before.now i wait to see how long it takes to update So thanks all for you comments and advice to myself and the many others in this thread.

tomcut

Hi - I wonder if anyone can help me make sense of this, as like everyone else I cannot get through to Future Pensions.

My forecast is £175.75 per week. I can claim my pension in May this year and won't be working before then. My COPE estimate is £7.90 per week. I have 36 years of full contributions, all before 2016.

It seems that it would be advantageous to pay voluntary NI contributions for the last couple of years to up my forecast to the maximum new state pension amount. But the whole contracting out business is very unclear to me - if I buy two more years will this up me to the maximum new state pension?

Thanks for any help!  

p00hsticks

tomcut said:

Hi - I wonder if anyone can help me make sense of this, as like everyone else I cannot get through to Future Pensions.

My forecast is £175.75 per week. I can claim my pension in May this year and won't be working before then. My COPE estimate is £7.90 per week. I have 36 years of full contributions, all before 2016.

It seems that it would be advantageous to pay voluntary NI contributions for the last couple of years to up my forecast to the maximum new state pension amount. But the whole contracting out business is very unclear to me - if I buy two more years will this up me to the maximum new state pension?

Thanks for any help!  

Yes any two post-2016 years with take you up to £185.15, so pick whcihever two are cheapest.
The first year will add £5.29 to take you to £181.04, and the second will add the final £4.11   (ignoring the increases that come into effect next week. 
Have you been invited to claim your state pension yet ? 
I believe they do a further calculation just prior to it starting, but if you intend to claim it in May you'd be best buying the years ASAP to ensure that they're included from the start of your claim. 

MartinT_2

I was able to contact the Future Pensions Centre by calling at 8am today. On hold for just over 10 minutes and then confirmed the advice given here. Transferred to HMRC and 18 digit code received and everything done all in about 20 minutes.

So thank you once again to the members of this forum for their advice.

Pat38493

MartinT_2 said:

I was able to contact the Future Pensions Centre by calling at 8am today. On hold for just over 10 minutes and then confirmed the advice given here. Transferred to HMRC and 18 digit code received and everything done all in about 20 minutes.

So thank you once again to the members of this forum for their advice.

This probably is a sign that a heck of a lot of people thought the deadline was yesterday because I think it still says that on some of the website information.

In fact it was extended to July.

Also - if like my wife you actually only need to get 2 recent years, there is no immediate deadline as she could do this anytime in the next 8 years or so.  

A lot of the high level media coverage glosses over a lot of these details so I expect they were getting a lot of traffic from people who technically didn't have the same urgency.

tomcut

Thanks @p00hsticks!

I also called Future Pensions at 8am and am still on hold! But at least I'm in the queue and not just being hung up on straight away as I have been every other time I tried!

jem16

pinnks said:

Not wishing to add to HMRC's workload but they can tell you when it arrived and which date's post they are working on if you call.

Doesn’t seem to be very accurate though. My son phoned in February to enquire about the progress to his application received 14th September. He was told they were working on post 30th August and should get to his in a few weeks. 

Since then I’ve been told recently on the HMRC Community Forums that they’re working on post from mid August. So 2 months later and they appear to be going backwards!

Suhusa

Rogerrabbit777 said:

A thank you to MSE for helping to make people aware of this situation and the loss of years that zero hrs/part time workers face (something that i never knew or was made aware of even though HMRC knew i was one of those workers)and members of the forum for their advice.After getting a forecast,today i have been able to buy three years for the price of one to get me to the “magic” year ten something that makes me feel alittle better as before i was totally unaware.Thankfully i have the money there to pay for it and its put me in a slighly better position than i was before.now i wait to see how long it takes to update So thanks all for you comments and advice to myself and the many others in this thread.

Late to the party, but depending on where you worked, the ten years may actually be somewhat irrelevant to you. If you can combine your overseas years with your UK years - which is certainly the case with pre-Brexit EEA year - and those add up to ten years or more, then you'll get a UK pension that way. You won't get the amount equivalent to 10 years though, just the pro-rata amount corresponding to your UK years, so it's still a good idea to buy all years you can buy with class 2 contributions, because that's an investment with spectacular returns.

Rogerrabbit777

Suhusa said:

Rogerrabbit777 said:

A thank you to MSE for helping to make people aware of this situation and the loss of years that zero hrs/part time workers face (something that i never knew or was made aware of even though HMRC knew i was one of those workers)and members of the forum for their advice.After getting a forecast,today i have been able to buy three years for the price of one to get me to the “magic” year ten something that makes me feel alittle better as before i was totally unaware.Thankfully i have the money there to pay for it and its put me in a slighly better position than i was before.now i wait to see how long it takes to update So thanks all for you comments and advice to myself and the many others in this thread.

Late to the party, but depending on where you worked, the ten years may actually be somewhat irrelevant to you. If you can combine your overseas years with your UK years - which is certainly the case with pre-Brexit EEA year - and those add up to ten years or more, then you'll get a UK pension that way. You won't get the amount equivalent to 10 years though, just the pro-rata amount corresponding to your UK years, so it's still a good idea to buy all years you can buy with class 2 contributions, because that's an investment with spectacular returns.

I only did two mimimum hrs 6 month contracts over two summers. unfortunately in the country im currently in theres a strong habit of illegal contracts where you are contracted for the minimum hours inorder to get healthcare S/S and the other hours are paid cash in hand. So tbh i would be surprised if i was entitled to anything but as the pension people said give it a go as you have nothing to lose as the payment difference for the classes are very large. But i thought it was better to get the three for one deal rather than lose them after july,if only because of  it been so much cheaper than paying for full years in the future. As it currently stands i think im only one year down so i will see what happens with the class 2. 

Thanks for your comment

molerat

[Deleted User] said:

Thank you p00hsticks and Rogerrabbit777 for your replies.

I definitely panicked the other day because I had so few years on my record and my first thought was to buy the years that would disappear at the end of July as I wouldn't get another chance to do so in the future. I now see why that wouldn't be the most sensible thing to do since I intend to work the remaining years.

Can anyone explain based on my forecast (posted on the 5th April) why certain years would be better value than others? I understand based on the guide that there was a change to how things work from 2016 but i'm just curious if for example I would of paid for the 10 years 2007-2008 to 2016-2017 how it would be different from buying the 10 years from 2012-2013 to 2021-2022?

I'm guessing whatever year you buy always subtracts a year from the total needed for a full state pension for my own forecast? But what would my total pension be as of today if I had paid for the 2 different lots of 10 years or would they have been the same total?

In your case there is no difference in value between pre and post 2016 years, it is all down to personal circumstances including contracting out and additional pension.  Your 2016 starting amount would be based on the new rules and ach year is worth £5.29 at 2022-23 values.