Guide discussion: Voluntary national insurance contributions

randm

I have a question please. Neither my husband or myself are able to access the pension area  or national insurance area on government gateway site. I rang through to pension forecast and was cut off, so I then filled out the forms for both of us and we have since had our forecasts through which both show the current pension amount. My question is this ……..if we had missing qualifying n.i. Years, or gaps in our n.i. Payments would this show on our pension forecast, or should I still try and phone through and ask if there are any missing gaps . Thank you.

MallyGirl

randm said:

I have a question please. Neither my husband or myself are able to access the pension area  or national insurance area on government gateway site. I rang through to pension forecast and was cut off, so I then filled out the forms for both of us and we have since had our forecasts through which both show the current pension amount. My question is this ……..if we had missing qualifying n.i. Years, or gaps in our n.i. Payments would this show on our pension forecast, or should I still try and phone through and ask if there are any missing gaps . Thank you.

If you say what your forecast is - based on contributions up to which tax year - then people can tell you whether it is worth investigating gaps.

randm

MallyGirl said:

randm said:

I have a question please. Neither my husband or myself are able to access the pension area  or national insurance area on government gateway site. I rang through to pension forecast and was cut off, so I then filled out the forms for both of us and we have since had our forecasts through which both show the current pension amount. My question is this ……..if we had missing qualifying n.i. Years, or gaps in our n.i. Payments would this show on our pension forecast, or should I still try and phone through and ask if there are any missing gaps . Thank you.

If you say what your forecast is - based on contributions up to which tax year - then people can tell you whether it is worth investigating gaps.

hi, thanks for the reply, it states we will get the maximum new state pension of £203.85 a week, on contributions up to this tax year(,if we keep paying in for a few more years) we are both early 50's. i just wanted to know whether or not theN.I information would have been show on the forecasts if either of us had any missing.

molerat

A forecast only shows what you have, what you can get going forward and then, and only then, if the going forward amount is not the maximum what you can get by filling past gaps.  To find any gaps you need to get a NI record.

Dazed_and_C0nfused

randm said:

MallyGirl said:

randm said:

I have a question please. Neither my husband or myself are able to access the pension area  or national insurance area on government gateway site. I rang through to pension forecast and was cut off, so I then filled out the forms for both of us and we have since had our forecasts through which both show the current pension amount. My question is this ……..if we had missing qualifying n.i. Years, or gaps in our n.i. Payments would this show on our pension forecast, or should I still try and phone through and ask if there are any missing gaps . Thank you.

If you say what your forecast is - based on contributions up to which tax year - then people can tell you whether it is worth investigating gaps.

hi, thanks for the reply, it states we will get the maximum new state pension of £203.85 a week, on contributions up to this tax year(,if we keep paying in for a few more years) we are both early 50's. i just wanted to know whether or not theN.I information would have been show on the forecasts if either of us had any missing.

You seem to be contradicting yourself there.

Maybe make life easier for everyone and just provide the full detail of your forecasts?

p00hsticks

Deleted_User said:

How do you know what the starting point is for your state pension to be worked out? I have 20 years pre 2016 and 7 years post 2016

If you mean whether your 'starting amount' at the introduction of the new State Pension in April 2016 is that from the old or new rules, then it will depend on your specific circumstances, including what COPE value was used. 
@xylophone often posts up the specific calculations used, and if you post up the details from your State Pension forecast then @molerat wil lprobably be able to tell you if your starting amount was that from the old or the new....

RunningMare

I wonder whether anyone here would be kind enough to calculate whether it is worth me making voluntary NI contributions in my circumstances. I am asking here because of the problems with the helpline and am grateful for any guidance you can give me. 
I am due to receive my State Pension in early 2026. 

Forecast is £175.23 if I contribute until 05/04/25 and £157.76 based on my record to 05/04/22. It also states “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”
I retired from the Civil Service in 2014 and made full contributions in the year 2014/15. I have made no contributions since. My record indicates 35 full years (although I can only count 33). My missing years are in the 1980’s when I was a student and from 2015/16 to now. 

I receive a reduced Civil Service pension but do reach the tax threshold. Receipt of a full State Pension would not put me in a higher tax bracket. I understand I would pay tax on at least 20% of the amount I receive in State Pension, because of my other income. 
I was contracted out and my COPE estimate is £94.98. 

I am in reasonable health and hope I will make it until my mid 70’s but who knows?!
Payment for 2015/16 and 2016/17 would have to be made by 31/07/23 and would be £824.20 for each year, so I need to make my mind up about those years soon. 

If anyone can give me some guidance, I would be very grateful. 

molerat

RunningMare said:

I wonder whether anyone here would be kind enough to calculate whether it is worth me making voluntary NI contributions in my circumstances. I am asking here because of the problems with the helpline and am grateful for any guidance you can give me. 
I am due to receive my State Pension in early 2026. 

Forecast is £175.23 if I contribute until 05/04/25 and £157.76 based on my record to 05/04/22. It also states “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”
I retired from the Civil Service in 2014 and made full contributions in the year 2014/15. I have made no contributions since. My record indicates 35 full years (although I can only count 33). My missing years are in the 1980’s when I was a student and from 2015/16 to now. 

I receive a reduced Civil Service pension but do reach the tax threshold. Receipt of a full State Pension would not put me in a higher tax bracket. I understand I would pay tax on at least 20% of the amount I receive in State Pension, because of my other income. 
I was contracted out and my COPE estimate is £94.98. 

I am in reasonable health and hope I will make it until my mid 70’s but who knows?!
Payment for 2015/16 and 2016/17 would have to be made by 31/07/23 and would be £824.20 for each year, so I need to make my mind up about those years soon. 

If anyone can give me some guidance, I would be very grateful. 

You need another 8 years of contributions to take you to the max £203.85. 7 will take you to £198.53 at £5.82 each, the 8th adding the final £5.32.

Any gaps 2015-16 and earlier will not add to your pension, only 2016-17 and later will add value.

You have 9 years available, 2016-17 to 2024-25.

Cheapest cost currently around £6.6K giving £46.09 pw / £2396.68 pa.

2016-17 will cease to be available from August and 2020-21 and earlier will increase to £907.40 from then.  2021-22 and 2022-23 stay at their current price until April 2024 and 2025 respectively.

Voluntary contributions pay back gross in around 3 years and are considered good value.

xylophone

Molerat (the owner of the magic spreadsheet ) has commented above.

In terms of your starting amount for new state pension, it was calculated at 6/4/16 as the higher of

Old Rules

NI  Qualifying Years/ 30 (max) x £119.30 (Full Basic) + (Additional State Pension - Deduction for Contracting Out).

In your case therefore

£119.30 + (ASP - "COD").

New Rules

{NIQY/35 (max) x £155.65 (Full NSP)) - Contracted Out Pension Equivalent.

In your case

£155.65 - £94.98.

It is obvious that your starting amount was given by the Old State Pension calculation.

You had a number of years from 6/4/16 to the year before the last full tax year when you would reach SPA.

You have made no contributions/received no credits for those years up to now but your starting amount has been index linked under the "triple/double lock".

Contributions/credits for those years could make them qualifying years which would enable you to reach an amount equal to (but not in excess of) a full NSP.

In your case, you need to purchase 8 years from those available 6/4/16 -  5/4/25 in order to reach a full NSP.

RunningMare

Thank you molerat and xylophone for your quick and comprehensive responses. I can now make an informed decision.
Many thanks