Paying for extra years, worth it?

p00hsticks

sevenhills said:

A friend has lots of NI gaps. We were talking last night and he said, dismissively, that if he pays more years he will be 74 before he is in profit.

Is your friend aware that he may lose the chance to fill some of those gaps in a few months ?

I'd suggest you point him in the direction of at the very least getting a state pension forecast if he hasn't done so already....

https://www.gov.uk/check-state-pension

(and then encourage him to come on here with the details if he's unsure whether or which years to fill)

eskbanker

squirrelpie said:

eskbanker said:

In terms of the question about life expectancy, there's a calculator on the ONS site

Sadly that calculator doesn't take many factors into account, so is not much use to the OP. There is a more detailed one, for example, at:

https://www.direct.aviva.co.uk/MyTools/LifeExpectancy/AboutYou

but I have no idea how well it works.

FWIW, it gives me an extra three years over the ONS one

A different calculator that asks more questions and gives a slightly different answer isn't necessarily any better than the less granular one, so I'd challenge the notion that the ONS one is "not much use to the OP" - according to the ONS figures, a 62 year old male is overwhelmingly likely (>80%) to reach 75, and even if OP's friend plugged in more personal details to give an answer of, say, 90%, or 75%, I don't think that's inherently more useful in the context of the question being asked (is it worth buying more NI years)....

Silvertabby

Albermarle said:

sevenhills said:

My friend has a small amount of wealth, not sure how much he has now, but he has talked about trading/gambling in shares some years ago.
You would think such people would be astute enough to pay NI and think and plan for their future. 

Some people are suspicious of anything government related, even to the point of causing problems for themselves.

I bought 4 years of voluntary Class 3s, which took me up to the full £185.15 per week.  I explained to a friend what a good deal this was, and suggested that she have a look at it herself.  But she just laughed and said that she wouldn't willingly give any more money to the Government.

NedS

Silvertabby said:

Albermarle said:

sevenhills said:

My friend has a small amount of wealth, not sure how much he has now, but he has talked about trading/gambling in shares some years ago.
You would think such people would be astute enough to pay NI and think and plan for their future. 

Some people are suspicious of anything government related, even to the point of causing problems for themselves.

I bought 4 years of voluntary Class 3s, which took me up to the full £185.15 per week.  I explained to a friend what a good deal this was, and suggested that she have a look at it herself.  But she just laughed and said that she wouldn't willingly give any more money to the Government.

As a tax payer, I am genuinely grateful for her unbeknownst public spiritedness given the hard times we are going through. The government needs all the help it can get and they will surely appreciate her not squeezing out every last penny from this extraordinarily generous offer.

fly-catchers

Silvertabby said:

Albermarle said:

sevenhills said:

My friend has a small amount of wealth, not sure how much he has now, but he has talked about trading/gambling in shares some years ago.
You would think such people would be astute enough to pay NI and think and plan for their future. 

Some people are suspicious of anything government related, even to the point of causing problems for themselves.

I bought 4 years of voluntary Class 3s, which took me up to the full £185.15 per week.  I explained to a friend what a good deal this was, and suggested that she have a look at it herself.  But she just laughed and said that she wouldn't willingly give any more money to the Government.

It’s like the way that everyone I have ever spoken to only go on about the lump sum. Saying they wouldn’t trust the company to keep on paying any pension. So grab the money when you can! I have given up giving any advice!

Silvertabby

fly-catchers said:

Silvertabby said:

Albermarle said:

sevenhills said:

My friend has a small amount of wealth, not sure how much he has now, but he has talked about trading/gambling in shares some years ago.
You would think such people would be astute enough to pay NI and think and plan for their future. 

Some people are suspicious of anything government related, even to the point of causing problems for themselves.

I bought 4 years of voluntary Class 3s, which took me up to the full £185.15 per week.  I explained to a friend what a good deal this was, and suggested that she have a look at it herself.  But she just laughed and said that she wouldn't willingly give any more money to the Government.

It’s like the way that everyone I have ever spoken to only go on about the lump sum. Saying they wouldn’t trust the company to keep on paying any pension. So grab the money when you can! I have given up giving any advice!

In my experience, over 90% of LGPS pensioners take the maximum commuted lump sum, despite the poor rate of 1:12.

We weren't allowed to give advice, but that didn't stop soon-to-be pensioners from telling us what they were going to spend their 'windfall' on.  New car, new kitchen, family holiday, etc.  In particular, for those who had spent their entire working lives on not much more than minimum wage, that sum of money was riches beyond their wildest dreams. 

Secret2ndAccount

Silvertabby said:

...  In particular, for those who had spent their entire working lives on not much more than minimum wage, that sum of money was riches beyond their wildest dreams. 

To be fair to that cohort, their SP plus their remaining LGPS pension was probably as much as they were used to living on anyway. So the large lump sum might have been the best route to happiness for them, even if numerically it was a bad deal.