Guide discussion: Voluntary national insurance contributions

PierreLeSol

molerat said:

If you had posted all your forecast figures here you would have got that info in around 5 minutes.

Not sure I agree molerat! The FPC have personal information to calculate the forecast. In my case, being in receipt of an occupational pension, COPE and unknown number of years contracted out complicated the issue.

I would advise anyone considering purchasing NI contributions to contact the FPC first.

Dazed_and_C0nfused

PierreLeSol said:

molerat said:

If you had posted all your forecast figures here you would have got that info in around 5 minutes.

Not sure I agree molerat! The FPC have personal information to calculate the forecast. In my case, being in receipt of an occupational pension, COPE and unknown number of years contracted out complicated the issue.

I would advise anyone considering purchasing NI contributions to contact the FPC first.

I think you underestimate the knowledge and understanding of the new State Pension on this board 🙂

p00hsticks

PierreLeSol said:

molerat said:

If you had posted all your forecast figures here you would have got that info in around 5 minutes.

Not sure I agree molerat! The FPC have personal information to calculate the forecast. In my case, being in receipt of an occupational pension, COPE and unknown number of years contracted out complicated the issue.

I would advise anyone considering purchasing NI contributions to contact the FPC first.

So I'm predicting that the FPC told you that the two gaps in your record that wouldn't increase your forecast were before April 2016, and the six years that would were those from April 2016-2022 inclusive ?

As molerat says, if individuals have, or can get, a Government Gateway Id, they can get their own individual forecast online (or they can apply by post if not), and that forecast, together with the linked NI record, will show the current and forecast amounts, full and gap number of NI years and the COPE figure. From those and the date at which a person reaches State Pension Age it's actually quite straightforward in the vast majority of cases to say whether the forecast can be improved and if so exactly how, and there are a number of contributors on this forum who would be able to do so.  
 

molerat

PierreLeSol said:

molerat said:

If you had posted all your forecast figures here you would have got that info in around 5 minutes.

Not sure I agree molerat! The FPC have personal information to calculate the forecast. In my case, being in receipt of an occupational pension, COPE and unknown number of years contracted out complicated the issue.

I would advise anyone considering purchasing NI contributions to contact the FPC first.6 pension works

I agree that the FPC will have the final say and can confirm your thoughts but it is simply a number crunching exercise based on the data that is available from your forecast and an understanding of how the post 2016 pension works. There is nothing you cannot work out for yourself from the forecast, the FPC have no "secret" information about you, they can likely see a lot more detail but most of it will be of no real relevance to your pension.

I correctly figured out my own and MrsM's at a time when FPC were actually giving out the wrong information !

I have also done my SIL's and worked out that taking her pre 2016 years beyond 30 with a COPE is beneficial - something that is against the general rule.

cdbe11

Slight confused, if anyone could help?

I know I'm a bit short of post 2016 contributions (my records below), but why do I need to make 2 years contributions for 1 years extra pension? My youngest child is 13 (9th April 2022) now so I'm "out" of free childcare credits - not sure exactly when the age 12 things stops but I'm not expecting anything for 21-22 but I live in hope!

And can anyone clarify what happens when the current transitional arrangements end - will there be another scheme to top up missing years?

And, just a general point not made explicitly clear in the MSE Guide, if you have any other retirement income/pension you will likely be taxed on any extra state pension at 20% - this must apply to the majority of people and a fair few of those just wont grasp this!

Thanks

Estimate based on your National Insurance record up to 5 April 2021

£179.71 a week

Forecast if you contribute another 2 years before 5 April 2037

£185.15 a week

£185.15 is the most you can get

• 35 years of full contributions
• 16 years to contribute before 5 April 2037

You do not have any gaps in your record.

2021-22

Your record for this year is not available yet

2020-21

Full year

View 2020-21details

2019-20

Full year

View 2019-20details

2018-19

Full year

View 2018-19details

Silvertabby

1 year adds £5.29.  £179.71 + £5.29 = £185.00, being under the maximum possible pension of £185.15.

So, you would need 2 years to accrue the full single tier pension, even though the second year would only give you 15p per week.

If you don't get a childcare credit for 21/22, and you don't intend working/paying NI between now and SPA, then you will be able to pay voluntary Class 3 NI contributions to plug the gap.  In current figures, that would cost you just over £800 for an extra £5.29 per week index linked State pension for the rest of your life - an absolute bargain!  However, not so much for the second year, which would still cost you over £800 for 15p per week, so probably not worth doing.

The State pension has always been classed as taxable income.  

p00hsticks

cdbe11 said:

Slight confused, if anyone could help?

I know I'm a bit short of post 2016 contributions (my records below), but why do I need to make 2 years contributions for 1 years extra pension?

Estimate based on your National Insurance record up to 5 April 2021

£179.71 a week

Forecast if you contribute another 2 years before 5 April 2037

£185.15 a week

Basically you're not allowed to go over the £185.15 maximum. so whilst one more year would add £5.29 to your pension, taking you up to £185.00 the extra year will only get you the extra 15p up to the top

Dazed_and_C0nfused

but why do I need to make 2 years contributions for 1 years extra pension? 

Because you're not one year short.  One additional post 2016 year will only add £5.29, taking you to £185.00.

Two year gets you £185.15.

Good if you will get that from working but not worth paying voluntary Class 3 NI (or Class 2 even).

cdbe11

Thanks for the replies - obviously need work on my maths. 

Obviously worth doing something for the full year but not the 15p.

I also found out about "starting credits" after often wondering how I got full years of contributions while at 6th form in the 80's!

olbas_oil

I am already at state pension age. So I followed step 5 of the guide and rang the Pension Service on 18 May. I was promised a letter explaining whether voluntary contributions would raise my pension within 10 working days. Nothing arrived. I phoned again on 15 June. Again they said they would send a letter within 10 working days. Nothing arrived. I rang on 30 June and was promised a manager call back which didn't happen. I rang on 7 July and asked for this to be treated as a complaint. I have now received a letter saying they have written to the 'Voluntary National Insurance Section based in Newcastle' but  they are taking 8-10 weeks to reply.

When you published your guide on 15 May, did you think it would take this long?  Should there be a warning in the guide that the system seems to be broken?