Guide discussion: Voluntary national insurance contributions

tricky145

Hi Molerat.

 the increased cost being a hedge against stepping in front of a bus

Nicely put........

 Currently thinking will pay the two reduced rate post 2016 years £795.60 & £800.80

and wait then until final year before retirement.

Thankyou both for your comments.

pinnks

That sounds sensible.  I have had to pay all years 2019/20 to 2023/24 and am paying each just before the 2-year deadline to hedge against that bus.  It means I have a lot to shell out just before pension age but worth it in my opinion...

tricky145

Hi Pinnks,

Based on the previous v.helpful advice I have been looking deeper and in my case the year 20-21 does increase from £795.60  to £907.40 so am now thinking of paying for one year and revisiting every year to see how they are increasing.

That leaves 4 years to pay and you never know what's around the corner - those electric buses are very quiet.....

pinnks

2020/21 increases to £907.40 from 1 August, so is still available for £795.60 for a few weeks.

2021/22 stays at its £800.80 until 5 April 2024

2022/23 stays at £824.20 until 5 April 2025

Those are your 3 cheapest years.

After that, 2023/24 stays at £907.40 until 5 April 2026. 

Who knows what 2024/25 and later will look like.  The state pension must increase by at least the increase in average earnings.  The triple lock may or may not exceed that but with the increases in average earnings hovering around 6% so far this year (you'll need to wait for the September report to see the figure that would be used) and inflation maybe coming down to 5 or 6% by September, an educated guess would be that that £907.40 could increase to £950 or £960 for 2024/25, who knows? 

Doctor_Who

Thanks for this thread, it’s been really useful.

Would someone please check my thoughts below and let me know if they are correct.

Forecast if you contribute another 6 years - £203.85 per week (max I can get)

Amount accrued to April 2022 - £171.17 per week

Tax year you reach SPA - 2034-35

COPE estimate - £59.96 per week

How many pre 2016 years you have - 27 years 

How many post 2016 years you have - 5 years

Which pre 2016 years are available - none

Which post 2016 years are available - 2021-22 and 2022-23

Unlikely to return to paid work and won’t get NI credits

I understand there is no rush for the July 2023 deadline since I have no pre 2016 years to fill.

My understanding is that I can buy the 2021-22 year for £800.80 (until April 2024) and the 2022-23 year for £824.20 (until April 2025). These will increase my state pension by £5.82 per week (£302.64 per year) for each of the two years.

I can continue to do this for subsequent tax years until I have added 6 years. I know the final year will not add £5.82 (or whatever it is increased to) because I will hit the maximum pension allowed first.

molerat

You are correct in your thoughts.  The 6th year will add £3.56 at today's rate.

Doctor_Who

molerat said:

You are correct in your thoughts.  The 6th year will add £3.56 at today's rate.

Thanks, good to know my thinking is correct! I'll leave it until later in the year and then look into paying for the 2021-22 year before the price rises by over £100 in April 2024.

Sarahspangles

OH needs 2023/24 to qualify for a full SP, and has retired.  I know he could wait until this time next year (at the earliest) or March ‘25 to buy it, but is there a way to pay in-year, and if so is it cheaper? 

edgex

You can get your State Pension on 24 April 2047

Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year

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

£58.32 a week

Forecast if you contribute another 25 years before 5 April 2047

£203.85 a week



I do have 3 partial years post 2008.
2020-21 & 2021-22 have no NI paid.


Am I correct in assuming it's worth paying those 3 partial years, & the past 2 years whilst they are cheaper?

molerat

23-24 will not increase in price from its current amount until April 2026.  I believe the only way to pay it in year is by setting up a direct debit but he may have missed the boat on that now.  There would be no saving though.