Guide discussion: Voluntary national insurance contributions

molerat

Timbobmit said:

Thanks for all that & Sorry for troubling you when they were correct from the start, but makes me feel better knowing I’m not losing out somewhere.

But now hopefully you understand why

Hodgie

I came across this (by accident) in late 2021.  I had been recieving my state pension for three years and my wife, for just a year.  We rang the appropriate HMRCs and in both cases, they knew exactly what we wanted.  
I received my statement first which was to pay just over £215 to get an additional £9.90 per week.  It was a no-brainer.  I was more surprised when I was given back pay.
My wife's needed a little more thought but we decided to go with it.  After being paid her backpay it worked out that she paid just over £2k for and additional £27 per week.
In both cases we took into account income tax and life expectancy.
Perhaps people should be given a statement as they approach state pension age.

PattayaPete

OK so I paid for six years of missing years on my NI record when I was abroad. HMRC received the payments in early March and informed DWP. Nearly three months later DWP have not updated my pension to take into account the extra years.
Is this wait normal or is this just another blockage in the Civil Service post COVID?

Kindalon

molerat said:

Kindalon said:

My wife was caught by the increase in retirement age for women and having "self retired" early for personal reasons did then not have enough years for a full pension. She used her savings to buy the additional years on the basis of what seemed a good return. Sadly she died before before reaching retirement age. I had already reached retirement age, but because she had only bought the minimum number of years so there was no addition to my pension. Also, because I was already retired, I was not entitled to any bereavement benefit. The net result of this is that she has thrown away several thousand pounds of savings for no benefit. 

I am not saying that buying additional years is not a good idea, but that there are risks and you may wish to consider the timing of when you buy them.

Like everything you take a gamble but for the vast majority it is a gamble that pays off handsomely.  MrsM is now just at break even point and I have 6 months to go for our combined £5K so looking forward to our free money.

As you say, it's a gamble. At the end of the day I'm in a position to be able to suffer the loss, but there may be some to whom the amount paid in is significant in terms of their financial situation. It's just that the guide focussed on the upside and not on the risks that people need to consider. What brought it home even more is that my wife had not taken her personal pension and they made a significant ex gratia payment, reflecting the value of the pension pot that she had built up.

A separate and unrelated point that I was trying to make was about bereavement benefit. It was not payable because I was over retirement age. I'm not sure why my age is relevant. It just feels an injustice that she has paid NI for all of these years for no benefit. Again, whilst I can suffer the not receiving a payment there are many people for whom a bereavement payment would be a considerable help.

Malonthemove

Hoping someone can help.

My wife and I are approaching retirement age.  We have spent many years abroad so need to top up our NI contributions.  I'm okay as I have more than 10 years already so toping up is not a problem.  My wife only has 9 years so is short 1 year for getting a pension.  I was under the impression that getting a pension depended on NI contribution years so my wife could top up as well.  Unfortunately, when she phoned Pensions she was told that the 10 years had to be work years, so she couldn't do voluntary top up payments and would have to go back to work for a year in order to get a pension.

This doesn't seem quite right to me.  Is this correct, or has she been given incorrect advice?

Dazed_and_C0nfused

Malonthemove said:

Hoping someone can help.

My wife and I are approaching retirement age.  We have spent many years abroad so need to top up our NI contributions.  I'm okay as I have more than 10 years already so toping up is not a problem.  My wife only has 9 years so is short 1 year for getting a pension.  I was under the impression that getting a pension depended on NI contribution years so my wife could top up as well.  Unfortunately, when she phoned Pensions she was told that the 10 years had to be work years, so she couldn't do voluntary top up payments and would have to go back to work for a year in order to get a pension.

This doesn't seem quite right to me.  Is this correct, or has she been given incorrect advice?

That contradicts gov.uk.

https://www.gov.uk/new-state-pension#:~:text=You'll usually need at,and paid National Insurance contributions

However gov.uk does not trump the legislation, and is known to be wrong in some places so isn't conclusive but I would suggest you ask again.

Future Pension Centre have a very good reputation so are the best people to contact.

Mmaatttt

Am I correct in thinking it's best to pay at the end of the tax year as my £3K can be earning elsewhere until then?

MSE_Clare

Mmaatttt said:

Am I correct in thinking it's best to pay at the end of the tax year as my £3K can be earning elsewhere until then?

That's a great point! You've got until the 5 April to top up previous tax years. So if you're not yet claiming your state pension, it's better sitting in a savings account - Check out our top savings accounts. There's currently a 6 month fixed account offering 2%.

Audaxer

Mmaatttt said:

Am I correct in thinking it's best to pay at the end of the tax year as my £3K can be earning elsewhere until then?

Yes, but best not to leave it until too near the end of the tax year, as HMRC say it can take up to 10 weeks for them to process the payments.

Nico60

I’m still not sure of what I will get, it says the £185 per week but then underneath that bit, that I was contracted out at some stage and that £82 was COPE and would be paid through my other pension if I read it right. So does that mean I will only be getting £103 from the government per week? If so I need to get some paid into my NI!