Guide discussion: Voluntary national insurance contributions

drlabman

I made a voluntary payment for one year (9 extra weeks to give me a full year) a few weeks ago, and to my amazement my forecast has already been updated.  The bloke on the phone said it could take 8 weeks so I'm very surprised.  Have HMRC finally got their act together, or are fewer people doing it because of the latest date shift, or have I misread my forecast?

Dazed_and_C0nfused

drlabman said:

I made a voluntary payment for one year (9 extra weeks to give me a full year) a few weeks ago, and to my amazement my forecast has already been updated.  The bloke on the phone said it could take 8 weeks so I'm very surprised.  Have HMRC finally got their act together, or are fewer people doing it because of the latest date shift, or have I misread my forecast?

As you haven't given us the before and after picture it's tricky to know for certain but could it be that 2022-23 has now been updated and it's this that has made the difference to your forecast?

drlabman

Dazed_and_C0nfused said:

drlabman said:

I made a voluntary payment for one year (9 extra weeks to give me a full year) a few weeks ago, and to my amazement my forecast has already been updated.  The bloke on the phone said it could take 8 weeks so I'm very surprised.  Have HMRC finally got their act together, or are fewer people doing it because of the latest date shift, or have I misread my forecast?

As you haven't given us the before and after picture it's tricky to know for certain but could it be that 2022-23 has now been updated and it's this that has made the difference to your forecast?

My 2018-2019 NI record was previously showing:
Year is not full
You have contributions from
Paid employment: £511.18
You can make up the shortfall, etc, etc,

So I made up the shortfall by paying them the required £142.65.

It's now showing
2018-2019 Full year
(including Voluntary: 9 weeks)

My forecast has gone up from £155.18 to £161, which was the expected increase of £5.82 for an extra year's contribution (in 2023-2024 numbers).

Pretty sure that means they've processed my voluntary contribution, no?

Wesser1952

I did get through to speak to someone and was told cant pay up your contracted out portion of N.I contributions,is this correct? I have 49yrs fully paid it says obviously less contracted out portion, at the time we were badly advised by British Telecom it wouldn’t affect our pension but that was before the New pension scheme started any ideas

cmms1920

In your advice on claiming NI credits it says that you may be able to claim credits if you were unemployed and actively looking for work. Your advice states 'There’s no time limit but it’s best to make your application as soon as possible'.

I have recently attempted to claim on this basis for a few missing years around 20 years ago as I still have 50+ copies of job applications/ rejection letters etc. 

My claim has been rejected on the basis that it is 'unreasonably late'. 

I have appealed but I'm not holding my breath!

Dazed_and_C0nfused

Wesser1952 said:

I did get through to speak to someone and was told cant pay up your contracted out portion of N.I contributions,is this correct? I have 49yrs fully paid it says obviously less contracted out portion, at the time we were badly advised by British Telecom it wouldn’t affect our pension but that was before the New pension scheme started any ideas

Why do you think you might have been badly advised 🤔

Would you rather have paid a higher rate of NI and received maybe £300/week State Pension and no BT pension?

Or in actual fact is the State Pension you will be entitled to having contracted out plus your BT pension better than that?

Which tax year do/did you reach State Pension age and do you have any post 2016 years which can be filled?  And what is the current amount you have accrued?

If you have some post 2016 years which can be filled then it could be that you can increase your existing State Pension entitlement.

jem16

Wesser1952 said:

I did get through to speak to someone and was told cant pay up your contracted out portion of N.I contributions,is this correct? I have 49yrs fully paid it says obviously less contracted out portion, at the time we were badly advised by British Telecom it wouldn’t affect our pension but that was before the New pension scheme started any ideas

I think you’ve probably misunderstood the advice rather than being badly advised. Under the old system contracting out didn’t affect your entitlement to the Basic State Pension but it did affect your entitlement to additional pension from SERPS and S2P, both of which are earnings related. You and your employer both paid less NI and in return your BT pension makes up the difference and in most cases pays out far more. 

The Basic State Pension today pays around £156pw. You will get no less than that as you always expected. If you’ve worked from April 2016 you’ve probably improved on that which you could never have done under the old system. So you’re really a winner. 

Lion0910

Hi, I’m looking for some input on my situation if possible.  I am currently unable to access my account online but I have some information I have received by mail from DWP.  

Weekly forecast £62.50 accrued up to April 2022 

Forecast £149.86 per week

I can improve my forecast to £203.85

Tax year I reach state retirement age 2037-38

COPE amount is £19.19

I have not received details from DWP of which years are full or partial so this is a summary based on my own records. 

I commenced work in the UK when I turned 18 during July 1988 and I continued to work without a break until September 1997 when I left the country. I believe my full and partial years are as follows:

Tax year 1988-89 partial year

Tax year 1989-90 full year

Tax year 1990-91 full year

Tax year 1991-92 full year

Tax year 1992-93 full year

Tax year 1993-94 full year

Tax year 1994-95 full year

Tax year 1995-96 full year

Tax year 1996-97 full year  

Tax year 1997-98 partial year

ie 8 full years

I suspect I also received 3 years of educational credits.

I was contracted out for all but my first year working.

It is unlikely I will be in paid work in the UK prior to retirement so building up my forecast will be via voluntary contributions only.  

I submitted form CF83 months ago but it looks like it will be some time before I have a response. Meanwhile I’m trying to get a better handle on how this all works and how much it might cost so I can have my finances in order.  

In order to maximise my pension, should I buy back all my years from 2006 or are some years not worth buying?  It would likely be a combination of Class 2 and Class 3 contributions.  

Are there any issues I should be aware of for years pre or post 2016 in my situation? Anything else I should be aware of?

Thanks in advance for any guidance.

SwiftSuzie

Lion0910 said:

Hi, I’m looking for some input on my situation if possible.  I am currently unable to access my account online but I have some information I have received by mail from DWP.  

Weekly forecast £62.50 accrued up to April 2022 

Forecast £149.86 per week

I can improve my forecast to £203.85

Tax year I reach state retirement age 2037-38

COPE amount is £19.19

I have not received details from DWP of which years are full or partial so this is a summary based on my own records. 

I commenced work in the UK when I turned 18 during July 1988 and I continued to work without a break until September 1997 when I left the country. I believe my full and partial years are as follows:

Tax year 1988-89 partial year

Tax year 1989-90 full year

Tax year 1990-91 full year

Tax year 1991-92 full year

Tax year 1992-93 full year

Tax year 1993-94 full year

Tax year 1994-95 full year

Tax year 1995-96 full year

Tax year 1996-97 full year  

Tax year 1997-98 partial year

ie 8 full years

I suspect I also received 3 years of educational credits.

I was contracted out for all but my first year working.

It is unlikely I will be in paid work in the UK prior to retirement so building up my forecast will be via voluntary contributions only.  

I submitted form CF83 months ago but it looks like it will be some time before I have a response. Meanwhile I’m trying to get a better handle on how this all works and how much it might cost so I can have my finances in order.  

In order to maximise my pension, should I buy back all my years from 2006 or are some years not worth buying?  It would likely be a combination of Class 2 and Class 3 contributions.  

Are there any issues I should be aware of for years pre or post 2016 in my situation? Anything else I should be aware of?

Thanks in advance for any guidance.

Without wishing to preempt the experts here, and while you wait for them, your situation seems quite similar to mine, although I had 17 years before going abroad and they were earlier than yours. However, it looks to me like you should buy all of the available years from 2006 onward because you would still have less than the 30 years pre 2016 beyond which it starts becoming of questionable value. Then each of the post 2016 years will add £5.82pw to your pension. Also, apply to pay Class 2 rather than Class 3 (11 grand difference in cost) sending evidence of overseas employment and/or self-employment. I was going to buy Class 3, and I am very grateful that the advice on this forum saved me a 5 figure sum. You need form CF83. Good luck!

SwiftSuzie

Ah. Just reread you already did CF83. Good luck anyway.....