Voluntary NI contributions - No brainer?

gamston

get to pension age end of March 2023 so need to do it soon

You need to continue to contribute National Insurance to reach your forecast

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

£142.78 a week

Forecast if you contribute until 5 April 2022

£142.78 a week

You can improve your forecast

You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is

£174.52 a week

 

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £107.26 a week

 

You have:

• 42 years of full contributions
• 8 years when you did not contribute enough

 

 

jem16

gamston said:

hi folks

these are my short fall figures 

Just because a year has a shortfall does not mean paying it will improve your state pension.

The info that is needed comes from your state pension forecast so we need those details. If you come back with those details we can help but I don't think you need to pay for 8 years.

jem16

gamston said:

get to pension age end of March 2023 so need to do it soon

You need to continue to contribute National Insurance to reach your forecast

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

£142.78 a week

Forecast if you contribute until 5 April 2022

£142.78 a week

You can improve your forecast

You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is

£174.52 a week

 

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £107.26 a week

 

You have:

• 42 years of full contributions
• 8 years when you did not contribute enough

 

 

Ok so your last year of being able to contribute was 2021/22. This tax year won't count as you reach SPA. At the moment you have £142.78 and can make it up to £174.52 so an extra £31.74.

Paying for 6 years will be all that you can do as only post April 2016 years will make a difference to you.

Dazed_and_C0nfused

A good mornings work, your original £6,600 has now become ~£4,900 😀

Well worth doing compared to investing the money elsewhere.

p00hsticks

jem16 said:

gamston said:

get to pension age end of March 2023 so need to do it soon

You need to continue to contribute National Insurance to reach your forecast

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

£142.78 a week

Forecast if you contribute until 5 April 2022

£142.78 a week

You can improve your forecast

You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.

The most you can increase your forecast to is

£174.52 a week

 

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £107.26 a week

 

You have:

• 42 years of full contributions
• 8 years when you did not contribute enough

 

 

Ok so your last year of being able to contribute was 2021/22. This tax year won't count as you reach SPA. At the moment you have £142.78 and can make it up to £174.52 so an extra £31.74.

Paying for 6 years will be all that you can do as only post April 2016 years will make a difference to you.

Agreed - ignore the shortfalls before April 2016, but paying for the six years after - i.e. 2016-17 through to 2021-22 - will be well worth doing as it should see you in profit by around the time you turn 70.

Audaxer

p00hsticks said:

Audaxer said:

jem16 said:

gamston said:

hi folks, just check my NI shortfull, i need to pay £825 for 8 yrs when i retired early, total £6600  that takes my state pension from £142 pw to £174 pw, looks to me as if it will take me just over 4 years to get my £6600 back in the extra pension (on 20% tax), is that worth it ?
with this extra pension + company pension I'm around £1000 below the 40% tax theshold so in a few years the repayment period could rise if i go in the 40% theshold (yes I know I'm lucky, but I did pay lots of money into my pension) 

Are you sure all 8 years are required as £142pw to £174pw is only an increase of £32pw which is just over 6 years worth of contributions?

What years are you looking at paying and how many years do you have? What exactly does your forecast say?

Yes, important to know what years are missing, as I recently found out pre-2016 years may only increase the weekly amount by £4.73 rather than £5.29.

Or not increase it at all if you already had 30 (or sometimes 35) full years prior to 2016 - the devil is the detail, which is why we're always asking people to get their own indivudal forecasts and post the details up in order to be able to comment fully.

Yes, even the Future Pensions Centre got it wrong when I phoned up for my wife. She had two pre-2016 gaps and the FPC said paying these would increase her SP by £10.01 in total. But it only increased it by £9.46 (2 years at £4.73 pw) when HMRC finally applied the payments. I posted on here and was helped and advised that the £9.46 increase was in fact correct, but for some reason FPC had incorrectly worked out that one of these years would increase by £5.29 pw.

martynhall1

Hi, could you please advise on my scenario?

I retired in December 2021, and do not intend to work again, I am currently 61. I believe I have 2 options to increase my pension from current £177.85 a week to £185.15

1> make -voluntary payments between now and state pension date of December 2028 
2> we look after grandchildren 2 days a week, potentially claim via this route

Extract from my NI records:
You do not have any gaps in your record:

• 45 years of full contributions
• 6 years to contribute before 5 April 2028

You need to continue to contribute National Insurance to reach your forecast

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

£177.87 a week

Forecast if you contribute another 2 years before 5 April 2028

£185.15 a week

£185.15 is the most you can get

You cannot improve your forecast any further, unless you choose to put off claiming.

If you’re working you may still need to pay National Insurance contributions until 22 December 2028 as they fund other state benefits and the NHS.

You’ve been in a contracted-out pension scheme

Like most people, you were contracted out of state pension scheme

Dazed_and_C0nfused

One year will add £5.29 and the second the final £2.01.

Information about credits is available here

https://www.gov.uk/government/publications/national-insurance-credits-for-adults-who-care-for-a-child-under-12-fact-sheet/specified-adult-childcare-credits-fact-sheet

molerat

2> we look after grandchildren 2 days a week, potentially claim via this route

The obvious route !

This implies you have a partner, what about their record ?

martynhall1

molerat said:

2> we look after grandchildren 2 days a week, potentially claim via this route

The obvious route !

This implies you have a partner, what about their record ?

Hi, partner has full entitlement to state pension and retired the same time as me. Are there some alternative options from your query?