Class2 or Class3

Penlady

Future Pensions have identified 3 years l can buy to top up my pension
2006 -2009. I was self employed at the time. Should I be paying at Class 2 or Class 3 rate?
I can’t find the answer on any Govt we site. FP says Class2 but HMRC says Class3
Which is correct?

MX5huggy

Class 3 because you are paying to fill gaps in your record now. You chose not to pay Class 2 at the time. 

p00hsticks

Also - have Future Pensions confirmed that buying those years will definitely increase your forecast ?

Years prior to 2016 don't always (if you have 30 years or more prior to 2016 already, depending on your circumstances)

Penlady

Thank you for your response. Yes they have confirmed buying these years will add to my pension. I made the mistake of thinking when you paid Class 4 you didn’t need to pay Class 2. I corrected this as soon as I was made aware but I am lots of years short. I was OK until the Govt changed the goal post and made it 35 years to qualify. I think the whole system has changed so many times it has been hard to keep up.

Dazed_and_C0nfused

The 35 years rule doesn't apply to you though, you are under transitional rules where the number of years is much more specific to you.

Penlady

Thank you for your comment. You are right….I have only just found this out!
I was working on the 35 year rule…I hadn’t come across the transitional rules.
I have not seen any Govt explanation of this rule. I find it frustrating that the goal posts keep moving and the changes are not publicised properly. 

Dazed_and_C0nfused

Penlady said:

Thank you for your comment. You are right….I have only just found this out!
I was working on the 35 year rule…I hadn’t come across the transitional rules.
I have not seen any Govt explanation of this rule. I find it frustrating that the goal posts keep moving and the changes are not publicised properly. 

It's been covered on gov.uk for several years now.

https://www.gov.uk/new-state-pension/how-its-calculated

Although Royal London have a much more detailed guide here,

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.royallondon.com/siteassets/site-docs/media-centre/good-with-your-money-guides/topping-up-your-state-pension-guide.pdf&ved=2ahUKEwjV0enIvbD5AhVHT8AKHamDBQ0QFnoECBIQAQ&usg=AOvVaw1EZqV_HvoxbZPC3Evp2a77

The crucial thing for you do now is read your State Pension forecast in full, ignoring the headline figure.

Then you will know exactly where you stand.

Penlady

Thank you for your detailed response I am very grateful for the time you have taken to reply. I will read the Royal London explanation and do my best to understand it. How do you know what your starting figure is? I have no record of what National Insurance I have paid since I started work in 1978. Can you request this information from DWP or HMRC?

molerat

Your on line tax account will show which years are full and how much NI you paid each year if employed, not sure how it displays class 2 & 4 contributions, and any credits / voluntary contribution weeks.

Dazed_and_C0nfused

Penlady said:

Thank you for your detailed response I am very grateful for the time you have taken to reply. I will read the Royal London explanation and do my best to understand it. How do you know what your starting figure is? I have no record of what National Insurance I have paid since I started work in 1978. Can you request this information from DWP or HMRC?

You can see it all on your Personal Tax Account on gov.uk.

Honestly before reading everything and worrying about your NI record you would be much better served by actually checking your forecast (in full).

Penlady

I have obtained my forecast and also written to Future Pensions who have told me I can pay 3 years 2006 to 2009 to top up my pension. They said I have to confirm this with HMRC. HMRC had previously said I have to confirm this with FP….which I have now done. However FP says I pay the 3 years at Class2 as I was self employed these years yet HMRC says I pay at Class 3…. so I am now confused. I tried to pay these years in 2019 at Class 2 as advised by HMRC (Giro confirmed this amount too!) and HMRC just sat on the money and didn’t alter my record or write to explain to me why. It was only when I queried it with them did they say I needed to confirm it was worthwhile with FP. Which I have now done! I am afraid I have lost trust in the whole situation but I have do do something before April 2023 as the window to pay these years closes then.
Do you know of anywhere that will check everything for you?