Voluntary Class 3 NI contributions

Umiamz

I took early retirement on the 31st March 2020 and I'm now living off a couple of private pensions. I've done a state pension forecast which said that I need to pay a further 3 years of NI contributions to receive the full amount. Having downloaded the application form for Class 3 voluntary contributions, it says that voluntary contributions do not always increase your state pension and to seek advice from the Future Pension Centre. I tried to do this but gave up after 30 minutes of waiting for an answer.

So, I'm really just looking for confirmation that paying Class 3 VCs will do what I need. I'm intending to pay for 2021/22 (which still isn't showing in my NI record yet), 2022/23 and 2023/24. I can claim the state pension starting in the 2029/30 tax year.

Thanks in advance...

Dazed_and_C0nfused

No one can answer that without knowing the full details of your forecast.

It sounds plausible and if there is no possibility of paying voluntary Class 2 or getting credits then it is usually an excellent investment.

One thing to be particularly careful about is the final year.  As you personally cannot exceed £185.15 (at current rates) the final year might just add the final penny or it could add a full £5.29.  So the exact shortfall is a factor in deciding if all 3 years are worth buying.

For example if you are currently on £173.00 then you would be purchasing ,

Year 1 £5.29
Year 2 £5.29
Year 3 £1.57

Umiamz

Dazed_and_C0nfused said:

No one can answer that without knowing the full details of your forecast.

It sounds plausible and if there is no possibility of paying voluntary Class 2 or getting credits then it is usually an excellent investment.

One thing to be particularly careful about is the final year.  As you personally cannot exceed £185.15 (at current rates) the final year might just add the final penny or it could add a full £5.29.  So the exact shortfall is a factor in deciding if all 3 years are worth buying.

For example if you are currently on £173.00 then you would be purchasing ,

Year 1 £5.29
Year 2 £5.29
Year 3 £1.57

Thanks - that's a good point which hadn't occurred to me. I'm currently forecast £169.66 a week.

There's no possibility of paying Class 2 VCs or getting credits.

Dazed_and_C0nfused

Definitely worth adding the 3 years then.

Always worth checking with FPC just in case there is a cheaper alternative (older post 2016 part paid year for example) but it is a great return on your money even if you have to pay c£2,500 for the 3 years.

Umiamz

Dazed_and_C0nfused said:

Definitely worth adding the 3 years then.

Always worth checking with FPC just in case there is a cheaper alternative (older post 2016 part paid year for example) but it is a great return on your money even if you have to pay c£2,500 for the 3 years.

I don't think there will be - the only part-paid or zero paid years are when I took a break from working to go to university back in the 1990s.

I'm thinking of paying via direct debit - does anybody know if it's necessary for me to cancel the DD at the appropriate time or will HMRC make a final collection when I've contributed enough for a full state pension?