Voluntary NI contributions - No brainer?

molerat

RG2015 said:

molerat said:

RG2015 said:

Dazed_and_C0nfused said:

NorthLondoner said:

I have a small shortfall on the state pension forecast of £182.30 a week instead of the full £185.15

I've paid 33 years full NI and there's 9 years incomplete. The cheapest of those missing years is £795 - paying that would according to the government future pension forecast helpline, give be the full pension. But that will take just over 5 years to pay for itself - i.e. it will take 5 years before the extra 2.85 I gain per week matches the £795 I paid out to get it. I don't think its worth it, or am I missing something?   

Yes, two things in fact.

That £2.85 will become £3.13 from April 2023.

And you could be getting it for 30+ years.

It's not as clear cut as getting the full £5.29 but it's not a bad deal.

If the shortfall is currently £2.85/week instead of a full year of £5.29/week, shouldn't there be a cheaper year's payment than the full £795?

Or in other words, a year that has been part filled rather than empty.

I don't follow your logic there. There is no correlation between the amount needed to bring the pension up to the full amount and the price of a year. If the only year available to buy is a full price year then it will still be full price whether it produces £5.29 or 1p.

My SIL's would blow your mind, buying 7 years produced 4 different pension increase amounts per year- £2.64, £3.89, £4.73 and £5.29. A smarty point for the correct reasons why

Okay, my mistake. I thought there was a correlation.

I thought I recalled having a part filled year that could have been filled with a smaller payment proportional to the number of missing weeks.

Yes, a part filled year will cost less than a full year to buy but that is only if there is one available - a part filled year topped up would still produce the same pension amount as a full price year in this case.  There is no correlation between how much a year costs and how much it produces.

bostonerimus

Sea_Shell said:

When they finally process this payment, will it automatically show on my SP forecast and also that those years are no longer 'gaps' in my NI record?

I know it's only been about 6 weeks (including xmas) so I'm not going to ring up just yet, but wanted to know what I should be checking, or looking out for.

Thanks

I generally take a look at my record a couple of months after I send HMRC my payment. I do this through electronic transfer and keep the confirmation numbers and receipts for the transfer and also include a note on the transfer like "Class 2 NI for 2022" etc.
just in case I have to argue. In 38 years there's never been an issue.

t0rt0ise

NorthLondoner said:

I have a small shortfall on the state pension forecast of £182.30 a week instead of the full £185.15

I've paid 33 years full NI and there's 9 years incomplete. The cheapest of those missing years is £795 - paying that would according to the government future pension forecast helpline, give be the full pension. But that will take just over 5 years to pay for itself - i.e. it will take 5 years before the extra 2.85 I gain per week matches the £795 I paid out to get it. I don't think its worth it, or am I missing something?   

I would pay it. My state pension is a bit short of the full amount because I was unable to get it any higher and I am watching the gap between mine and the full amount get wider and can only imagine how wide it's going to get over the next decades that I hope to still be around. I would have paid anything to have been able to get it up to the full amount.

molerat

Sea_Shell said:

Sea_Shell said:

Well that was painless.

Just spent a few minutes on the phone to HMRC (rang at 8.02am) and got straight through to a human, after listening to their blurb and answering the automated questions.

We agreed all the figures.

18 digit code received, and so once I have the money from a maturing account later this week, I shall get that paid up.

He said it could take up to 6 weeks for the payments to be reflected in my pension forecast.

I can see from the reference that it includes a mixture of the amount to be paid and my NI number.

All done.

Entered the 18 digit number, linked through to my bank account, made payment.

Email confirmation received.

It said it will take just a few days to register ?!?..but I've diary'd for a month's time, to check my SP forecast has been updated .

SIL paid end Nov and it has updated today so about 7 weeks.  Unfortunately they have messed up the amounts, she paid what was indicated on her forecast for the 7 years needed (after checking with FPC) and all were allocated correctly apart from one year which was 35 weeks for which they have only allocated 25.  Looks like finger trouble as it seems it is all manual input stuff and the year above was 25 weeks. 

Sea_Shell

If I need to ring them to follow up (chase) on my payment, which is the best number to use?

The on-line account says for "help" to use the 0800 number, but I think that's the one for the Future Pension centre.

Or should I use the 0300 number which I rang to actually make the payment?

molerat

Sea_Shell said:

If I need to ring them to follow up (chase) on my payment, which is the best number to use?

The on-line account says for "help" to use the 0800 number, but I think that's the one for the Future Pension centre.

Or should I use the 0300 number which I rang to actually make the payment?

If it is reference a payment not yet being applied then it is HMRC you need to speak to,  DWP only deal with what has been applied or needs paying.

molerat

0300 200 3500

fly-catchers

Once you have your 18 digit number do you need to pay in the money as soon as possible. Or doesn’t it matter as long as it’s within a reasonable period. I intend to buy my missing year at some point this year but thought if get my number that’s one thing less to think about!

Sea_Shell

fly-catchers said:

Once you have your 18 digit number do you need to pay in the money as soon as possible. Or doesn’t it matter as long as it’s within a reasonable period. I intend to buy my missing year at some point this year but thought if get my number that’s one thing less to think about!

I think it remains valid until the end of the tax year, as after then the figures will change.

Sea_Shell

SUCCESS!!!


Just logged in, and my new SP amount is showing, following my payment.   I'm up to £168.10 a week.

I'll re-assess making up the further shortfall nearer the time, but at least that's the cheap part years paid for.


I didn't ring them in the end, just waited a few more days.    I made the payment on 2nd December 2022.