Guide discussion: Voluntary national insurance contributions

ekiflump

Warning, the new online top up system has a major bug in what it displays as your projected future pension if you were to pay for given voluntary contribution years. In my case it massively overstates the increase as being over £50 per week extra pension just for topping up the first missing year, when I would actualy only get about £6 extra for any year. Randomly it sometimes shows the right amounts when revisiting the same page.

Also I noticed if you opt to make the payment offline it just dumps you on a page telling you HMRC sortcode and account number. No reference number is given to include, like you would get if you phoned, so how would they know what your paying for?

canary2211

molerat said:

The system should not be "assuming" anything about 22/23 as that year is now closed and reconciled so what is on the forecast should be fact.  What does it show for that year when you click on it ?

Thanks - I checked and you are right about 22/23 - which correctly shows gap of 824.20. 

In detail it shows 
22/23  not full 824.20
21/22 not full 800.80
17/18 to 20/21 - full (topped up a year ago)
16/17 not full 824.20

Max SP is 220.10.  SP based on existing contributions record to 22/23 is 194.82 

The pay online gap bit (accessed by lying about when NICs were stopped) shows a maximum top up of 
22/23, 21/22 and 16/17 - total £2449 increasing SP to max of 220.10 an increase of £25.28 a week - a payback of 96 weeks (boom!)

So i guess my question remains - do we leave 22/23 gap and not top up for that (in which case SP increases to 213 a week), and at some future point use the child care credits to fine tune 23/24 and ignore any remaining gaps as they dont buy extra SP?

Maybe this is a child care credit question?

molerat

The pay online gap bit (accessed by lying about when NICs were stopped) shows a maximum top up of 
22/23, 21/22 and 16/17 - total £2449 increasing SP to max of 220.10 an increase of £25.28 a week - a payback of 96 weeks (boom!)

It looks like you have fallen foul of the "extra year" bug in the the new system.  3 years will only add  £18.96.

Sea_Shell

*Ignore - found specific thread.*


Are you able to use the new online facility if you're not currently paying NI?

I looked the other day, and I'm sure it said that I couldn't use it and that was one of the questions.   I might be misremembering though 😉

Currently 52 and not working, through choice.

What would happen if I tick yes, when I'm not?  

double_dutchy

Sea_Shell said:

Are you able to use the new online facility if you're not currently paying NI?

I'm in that position too @Sea_Shell  - did you find the answer?

Sea_Shell

double_dutchy said:

Sea_Shell said:

Are you able to use the new online facility if you're not currently paying NI?

I'm in that position too @Sea_Shell  - did you find the answer?

Yes, Have a look at this thread...


https://forums.moneysavingexpert.com/discussion/6524584/boosting-your-state-pension-should-now-be-quicker-and-easier-as-new-online-tool-launches#latest

golf_player

I’m new to this forum game so not sure if I’m posting this correctly. Does anybody know how to determine how much of a current state pension forecast is related to previous SERPS contributions? I am getting my state pension and get around £50 pw above the £220 figure(I was in SEPS for many years)  - I’m trying to check my partners figures to know if he should buy extra years - his forecast is showing  £5 pw above the full figure but he has a lot of incomplete years so needs to know whether to top up.

molerat

golf_player said:

I’m new to this forum game so not sure if I’m posting this correctly. Does anybody know how to determine how much of a current state pension forecast is related to previous SERPS contributions? I am getting my state pension and get around £50 pw above the £220 figure(I was in SEPS for many years)  - I’m trying to check my partners figures to know if he should buy extra years - his forecast is showing  £5 pw above the full figure but he has a lot of incomplete years so needs to know whether to top up.

If your amount is above the new full pension of £221.20 then you cannot fill any gaps after 2016.  If you have less than 30 years pre 2016 then making up to 30 would add to the pension.  The forecast will state if the pension amount can be increased.

Nomis65

Hi,

Here's an interesting one for all the number crunchers.

My wife will hit the magic 66 towards the end of the year and begin receiving her state pension. She hasn't worked for several years and was contracted out of the old state pension (public sector) for most of her working life. She had been topping up her NI contributions (buying additional years) until the gap between what she will get and what she could get by buying additional years dropped dramatically.

Her latest pension summary states that she will receive £220.60 of the possible £221.20 per week. That's only 60p per week (£31.20 per year) difference. As it happens she could buy an additional year for £729.10, but that year is 2010/11 so she's only got until April 2025 to do it. If she made it to 87 (average life expectancy), that's 21 years x £31.20 = £655.20. Since this is less than the £729.10 it doesn't seem worth it.

The state pension is guaranteed to increase by at least 2.5% each year under the triple lock, so that £31.20 increases to £51.12 after 21 years. With that factored in it the difference adds up to £848.12, and the actual figure will probably be higher. This tips the balance, but inflation will have reduced the spending power of that extra pension, so maybe not. And of course the £729.10 will be coming from a savings account currently earning 5.2%, so there's the loss of interest to take into account too.

I personally don't think it's worth the hassle. Can anyone persuade me otherwise?

Dazed_and_C0nfused

Nomis65 said:

Hi,

Here's an interesting one for all the number crunchers.

My wife will hit the magic 66 towards the end of the year and begin receiving her state pension. She hasn't worked for several years and was contracted out of the old state pension (public sector) for most of her working life. She had been topping up her NI contributions (buying additional years) until the gap between what she will get and what she could get by buying additional years dropped dramatically.

Her latest pension summary states that she will receive £220.60 of the possible £221.20 per week. That's only 60p per week (£31.20 per year) difference. As it happens she could buy an additional year for £729.10, but that year is 2010/11 so she's only got until April 2025 to do it. If she made it to 87 (average life expectancy), that's 21 years x £31.20 = £655.20. Since this is less than the £729.10 it doesn't seem worth it.

The state pension is guaranteed to increase by at least 2.5% each year under the triple lock, so that £31.20 increases to £51.12 after 21 years. With that factored in it the difference adds up to £848.12, and the actual figure will probably be higher. This tips the balance, but inflation will have reduced the spending power of that extra pension, so maybe not. And of course the £729.10 will be coming from a savings account currently earning 5.2%, so there's the loss of interest to take into account too.

I personally don't think it's worth the hassle. Can anyone persuade me otherwise?

Do you know that a pre 2016 will actually add anything to her entitlement?

How many pre 2016 years does she currently have?

Also, with a public sector pension in play her probable return is only 80% of the increase as she will no doubt be liable to basic rate tax on the extra 60p.