Guide discussion: Voluntary national insurance contributions

Geronimo23

Quick update on postal dates and cashing of cheque to cover missing 6 years of NII contributions 

 According to my bank account information,  I am pleased to report that my cheque ( posted on 13th March 2023) was  processed on the 4th April ( even just made the old deadline !).  Nothing has yet been updated on my NI record or Pension Forecast but I realise that this may take a bit longer. Will chase this up and report back.  

SandieS23

I think your guide needs to be a bit clearer for people living and working abroad who are eligible to pay Class 2 contributions. Are they also able to back pay to April 2006 as not clear? Can you do a guide the same as for Class 3 as to how much it will cost? Also you should be aware that if you are Living and Working abroad and want to pay Class 2 contributions you need to complete form CF83 and read guide N138. I have today been told by HMRC that they are currently working on applications for 11th August 2022 (They have a 34 week backlog!) I have been told that providing I get my application in before 31/7/23 that I will have met the deadline, but have great concern over this I think HMRC need to confirm this on their website. If you can do anything to help improve the backlog and get better clarification on the HMRC website and also your guide it would be much appreciated.

mellyj56

I started claiming my state pension last year. I don't receive the full pension because i worked abroad for several years and I thought it was too late to do voluntary contributions. After all the recent publicity I realised it wasn't too late and on March 21st I contacted the Pension Service as advised here. I thought i would have a massive wait to speak to somebody but it was quite quick. The advisor i spoke to said that she couldn't give me any information over the phone but that they would issue me a letter that would have "all the information that i need", including how much i could pay and the impact it would have and that would give me the magic reference number that i need to make the payments.

She said that there would be a delay in receiving this letter due the very high demand at the moment.  So now it has been 3 weeks and, while i am not panicking just yet, I am a little concerned because everybody on this forum seems to have got the information on the phone along with the reference.  I haven't seen anybody talking about being sent a letter.

Has anybody had the same experience as me?  Could it be because i am already getting my pension and different departments to do it differently? Perhaps a new process due to demand?

molerat

mellyj56 said:

I started claiming my state pension last year. I don't receive the full pension because i worked abroad for several years and I thought it was too late to do voluntary contributions. After all the recent publicity I realised it wasn't too late and on March 21st I contacted the Pension Service as advised here. I thought i would have a massive wait to speak to somebody but it was quite quick. The advisor i spoke to said that she couldn't give me any information over the phone but that they would issue me a letter that would have "all the information that i need", including how much i could pay and the impact it would have and that would give me the magic reference number that i need to make the payments.

She said that there would be a delay in receiving this letter due the very high demand at the moment.  So now it has been 3 weeks and, while i am not panicking just yet, I am a little concerned because everybody on this forum seems to have got the information on the phone along with the reference.  I haven't seen anybody talking about being sent a letter.

Has anybody had the same experience as me?  Could it be because i am already getting my pension and different departments to do it differently? Perhaps a new process due to demand?

Once you have started receiving your pension it is a paper exercise receiving the information and may take many weeks - often into months - to receive it.

[Deleted User]

Not sure if anyone else has this problem. I currently pay Class 3 NIC for current year by monthly direct debit. I decided to pay a previous year in full. For some reason this stops your direct debit and the monthly amount which normally comes out of your bank account is taken from the lump sum which was supposed to go towards a previous missing year. You then have to ring HMRC to reinstate the direct debit and credit the lump sum to the correct year. I thought this was a one off error but it has happened to me before. It might be worth mentioning this in your guide.

hodlstar

Another person looking for help (on behalf of my father).

I can't get my head around the COPE years and whether or not it's worth him doing voluntary contributions. 29 of the 30 years were pre-2016 which is what is confusing me. There is also the year 2022 to 2023 which does not have a record available yet, but which I know he did complete a full year. So in essence once the 2022-2023 year is added he will have 31 years, 29 of which were pre-2016.

My thinking is that he will be able to top up the remaining 4 years by paying for the 4 years from 2016-2020, and that even if he misses the deadline he would still be able to do that. Please can someone help me figure out if that is true?



Other figures from the forecast are as follows:

"You can get your State Pension on 18 January 2024

Your forecast is £181.58 a week, £789.55 a month, £9,474.59 a year

Estimate based on your National Insurance record up to 5 April 2022

£175.76 a week

Forecast if you contribute until 5 April 2023

£181.58 a week

You can improve your forecast

You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is

£203.85 a week

You’ve been in a contracted-out pension scheme

Like most people, you were contracted out of the state pension. Your COPE estimate is £53.75 a week

You have:

• 30 years of full contributions
• 1 year to contribute before 5 April 2023
• 19 years when you did not contribute enough
  

2020 to 2021

Year is not full

Pay a voluntary contribution of £795.60 by 5 April 2027. This shortfall may increase after 31 July 2023.

2019 to 2020

Year is not full

Pay a voluntary contribution of £824.20 by 5 April 2026. 

2018 to 2019

Year is not full

Pay a voluntary contribution of £824.20 by 5 April 2025. 

2017 to 2018

Pay a voluntary contribution of £824.20 by 5 April 2024. 

2016 to 2017

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2015 to 2016

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2014 to 2015

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2013 to 2014

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2012 to 2013

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2011 to 2012

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. 

2009 to 2010

Year is not full

Pay a voluntary contribution of £824.20 by 31 July 2023. "

Thank you so much in advance

molerat

He needs 5 years to reach the max.  If, as you say, he will get a full year for 22-23 from employment or benefits he needs another 4 at least 3 of which must come from 2016-17 and later as more than 1 earlier year will not add to his pension due to his contracted out status / COPE.  So 20-21 plus any other 3 - noting that a pre 2016 year will add a lower amount but doesn't matter if going for the full house but probably easier to stick with all post 2016.  The big thing to remember is that all of those still available years, 2017-18 and onwards, will be increasing to £907.40 after July.

hodlstar

molerat said:

He needs 5 years to reach the max.  If, as you say, he will get a full year for 22-23 from employment or benefits he needs another 4 at least 3 of which must come from 2016-17 and later as more than 1 earlier year will not add to his pension due to his contracted out status / COPE.  So 20-21 plus any other 3 - noting that a pre 2016 year will add a lower amount but doesn't matter if going for the full house but probably easier to stick with all post 2016.  The big thing to remember is that all of those still available years, 2017-18 and onwards, will be increasing to £907.40 after July.

That's great, thank you. I am going to have to do a similar calculation for my mother once I sign her up to the government gateway, can you explain to me how you come to the conclusion about which pre-2016 years count with regards to how the COPE status affects it? Alternatively if it's too complex I will just post her figures here as well as soon as I can. 

molerat

Quite simply you can without fail use 30 pre 2016 years, more than that is down to working out if the starting amount is under the old or new systems.

It is just a case of getting your head round how it works and then it is just fairly straightforward maths.

SwiftSuzie

Hi Folks. Thank you for accepting me to the site. I wonder if any of the experts here can assist me.

My NI record is as follows:

17 full years (1973-74 to 1989-90)  At which point I left the UK permanently.

Then 33 years empty (1990-91 to 2022-23).

My state pension date was 7th April 2023, so I am just now in receipt of my first payment. On the face of it, time-wise, the rules they have made surrounding the transition and the ability to buy back 17 years might have been designed especially for me. It looks like I am in the ideal position to purchase 10 pre-2016 (making 27) plus the 7 post-2016 years (making 34 in total out of a possible 35), and I can benefit straightaway without wondering for a decade or more if I will live long enough to see it. How good is that for buying a retirement annuity?

But I say on the face of it, because ringing the International Pension Centre is by no means a productive enterprise to put it mildly, and I now have quite a lot of experience to draw on! They pass you from pillar to post within DWP and HMRC, involving very long waits each time, and between all of them it is quite routine to be given misinformation.

Long story short. I applied for my pension on 8th December, the earliest date I could do so, sending in the international claim form and my ID, and requesting a quote for the appropriate years to pay Class 3 Voluntary NICs. On 28th January I received my pension award based on my 17 years before I left the UK which is £88.53 a week (pre-10.1% increase). This in itself was a surprise because a forecast I requested last summer predicted £82.90. In this same award letter it stated that I would be hearing from them regarding the Class 3 VNIC quote by email. Needless to say, I didn’t. Without going into the detail of all the intervening unanswered emails I sent chasing it and various phone calls in which I was told nonsense, I have reached the conclusion that even with the new deadline of 31st July, this is not going to happen unless I bypass them completely. Luckily, being overseas, I don’t need the mystical 18 digit code. I can simply make a bank transfer using my name and NI number as reference on the payment (and presumably hope it doesn’t disappear down a hole somewhere!). So what I would like, if possible, is for someone here with the knowledge to say I’m right in what I think, or not.

What I think is that I should buy all 17 years that are available to me. My only qualm about simply going ahead now and paying it is that I was contracted out between June 1980 and February 1989, and I had a COPE figure on my forecast which I am sure was £23.35 on my online forecast (the forecast has now disappeared because I’m of SPA), and I wonder if this could in any way negate the benefit of buying some or all of these pre-2016 years. I note that Molerat has previously stated that in all cases 30 years prior to 2016 is always worth having, so I reckon I’m safe by buying the full 10 to have a total of 27 pre-2016, but in the absence of any sense from the government I would obviously like to be sure about my specific circumstances before shelling out the money.

As an aside, the service is atrocious. I do understand why this is, but there should at least be a phone line for those who have imminent state pension dates approaching to sort out their affairs. It seems they are spending much of their time dealing with people who are a decade or more away. Due to their long delay after promising to sort this out in January, I have now passed my state pension date without resolution and am obviously losing money.

Many thanks for any help forthcoming!