State Pension - voluntary NI

Flugelhorn

I retired 2 years ago and have 2.5 years to go get my state pension - forecast is £168 / week - can't decide if it is worth paying the voluntary NI  to get more pension  - are there any calculators around to look at the figures?

molerat

Each year you buy gives you an extra £5.29 per week at a cost of around £800, you recover the outlay in around 3 years.  An absolute steal, an annuity would give you around 62p per week ! 

Buying additional years is generally always considered a good idea.  What exactly does your forecast show ?  It is likely that only post 2016 years will add to your pension.

Nebulous2

Lots of previous posts about this - but almost certainly worth it if you live. 

Around £800 for a years NI gives you over £5 a week indexed for the rest of your life. Pays for itself in 3 years. Where else can you get a return like that? 

Check your state pension forecast to see what it says. The payment is fixed per year at the same weekly amount, which means the final year may pay less and wont be as good a deal.  

JGB1955

I think I topped mine up to (almost) full amount by 3 years... I was sceptical (at age 60) that | would actually reach SPA.  £19K/17 months later, I'm happy with my decision!

Flugelhorn

thanks for replies, higher rate tax payer so that would be £150 a year extra, so a bit over 5 years to get money back, yep not bad deal - will look into it a bit further. 

all the pension forecast says is  £168@ 2021  but if  I continue to contribute for 3 years I could get £184 

Audaxer

Flugelhorn said:

all the pension forecast says is  £168@ 2021  but if  I continue to contribute for 3 years I could get £184 

That is correct then as each additional year adds on £5.29 per week.

Definitely worth doing even as a high rate taxpayer - as you say, you will recover that money in just over 5 years. You are very unlikely to find a better investment.