Guide discussion: Voluntary national insurance contributions

pinnks

It matters not that you have reached pension age - the same time limits still apply, and that is now 5 April 2025.  I would ensure you get your pension application in pronto as any you will want to get that up and running now.  Any changes if you decide to pay voluntary NI will cause a re-calculation of your pension.  Normally that is from the date you pay the voluntary NI and not backdated but I have no idea what date they will use now given the enormous DWP/HMRC delays.

If you are in the EU you should claim via the pension authority in your country of residence, even if you have not reached pension age in that country.

rhammett

Thanks - that's great advice. I didn't realise that you could still pay voluntary contributions to top up your pension after you had applied for the pension, that isn't clear on any website that I have found

SwiftSuzie

rhammett said:

Thanks - that's great advice. I didn't realise that you could still pay voluntary contributions to top up your pension after you had applied for the pension, that isn't clear on any website that I have found

I didn’t know either, and the info available officially is ambiguous. It says you cannot pay Class 2 if you are retired abroad. It omits to qualify this statement by saying you can apply to pay Class 2 for years before you retired if you were entitled to pay Class 2 when you were working. I can confirm this is the case because I have recently done it. Following advice on here, I submitted CF83 asking to pay, preferably Class 2, and the following week I received the quote for 17 years, total cost about £2800. So yes you can!

Broadsword66

WHEN?

Hi all,
 I'll be eligible for my State Pension in 9 years and 7 months, and need to top up 2 years to get full pension. Due to ill health I'm not working and am claiming a private pension but I'm not eligible for any state benefits so won't get any NI contributions that way. 

Here's my question: when should I pay for the top-ups to my state pension entitlement? 

I could do it now or, because my part years are both recent (2019/20 and 2020/21), I can delay until closer to the expected deadlines for those years (April 2026 and April 2028).
Given the huge backlog in processing payments right now, would there be any advantage to paying in advance now?  Should I save the payments (a total of £922), pocket the interest, and wait until closer to the 2026/28 deadlines?
Or, precisely because of the long delays, am I better off starting the process as soon as possible now just in case there's no improvement at the Future Pension Centre in the next couple of years?
TIA for your thoughts

p00hsticks

Personally, when I was in your position (although just voluntarily retired rather than through ill health, my preference was to set up a direct debit to pay for each current year as it arose in monthly installments
Apply to pay voluntary Class 3 National Insurance contributions - GOV.UK (www.gov.uk)

That way there is no need to speak to anyone - you simply fill in and send off the form.

I found it the best way to manage my cash flow, although there are disadvantages - namely that you need to remember to cancel the direct debit when you have paid enough, that you really need to get it set up towards the beginning of the tax year (they will take a back payment or two but I'm also not sure how far through the year they allow you to start paying) and that you are potentially handing over cash before you absolutely have to . 

pinnks

By contrast, I am taking the other approach of paying at the (normally) 2-year limit before the price increases, not so much (in the last few years) to gain any financial advantage as interest rates were so low but more to hedge against potential early mortality.  With interest rates now rising, I shall continue delaying as long as possible, though that will mean a big catch-up payment of 3 years' worth part way through 2024/25 in good time for DWP to have the data they need in spring 2025 to calculate my pension.

Personal choice at the end of the day as p00hsticks' and my approaches are both perfectly rational, as would be any other approach you could dream up
 

DrVenn

I wonder if any of the experts on here can give me some help on a (hopefully) simple query. 

I paid a voluntary contribution to add one extra year to take my state pension as close to the maximum as sensibly possible. That payment was made on 22/12/2022. I was already drawing state pension. I spoke to the DWP in April about another matter (change of bank account) and the very helpful lady said that they had not yet been advised of the payment by HMRC. She said she would prompt them following my call. Still no sign of the additional payment. I have held off pursuing the matter because of the impending deadline for voluntary contributions knowing that both DWP and HMRC would be busy. However, now that the deadline has been extended to April 2025, I would like to chase it up. 

Should I call HMRC or DWP to try to check progress and if so does anyone know the appropriate number to use. 

Thanks in anticipation. 

molerat

Do you have access to your on line tax account ?  If so is the year you paid showing as full ?

DrVenn

Yes I have checked online and the year is showing as not full. 

molerat

So it is HMRC who need to allocate the payment you made.  DWP cannot do anything until the year is full.  Have you checked that they have not allocated to a different year ?

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-insurance-enquiries-for-employees-and-individuals

0300 200 3500