Voluntary contributions

giogiu1974

Hi everyone, I have a questions on the voluntary contributions for the State Pension.

As you can see from the pics attached, I have 3 missing years (2015/2016; 2016/2017; 2017/2018) as I was studying and as I am 44 years old, I can get the State Pension on June 2046.

I am planning to move abroad next year.

As I need a minimum of 10 years to get the State Pension, is it worth to buy the 3 missing years (so to total 8 years) and then buying the 2 missing years in the future when they are available for me to buy? Is it even possible to do so?

Many thanks

pinnks

Your forecast suggests that if you continue paying until 5 April 2026 (5 April before you reach state pension age) you would get £148.12.  That is 2018/19 to 2045/46.  Paying those 3 years would add about £15 making about £163.   Those 3 years would cost £825(ish) each if paid before 5 April 2023.  If you do not pay by then, 2015/16 and 2016/17 would go out of date and be lost.  2017/18 would be payable but would cost £907.40.

If you are planning to move abroad and if you will be employed or self-employed then it is likely that you can pay those future years from 2023/24 to 2045/46 voluntarily under Class 2 at (currently) just under £165 per year (a no brainer).  You should have a read of NI38 and complete a form CF83 at the end of NI38 to get yourself set-up.  There is no immediate rush to do that (given the pressures on HMRC at the moment) as nothing will change on that front for the next 24 months.

giogiu1974

pinnks said:

Your forecast suggests that if you continue paying until 5 April 2026 (5 April before you reach state pension age) you would get £148.12.  That is 2018/19 to 2045/46.  Paying those 3 years would add about £15 making about £163.   Those 3 years would cost £825(ish) each if paid before 5 April 2023.  If you do not pay by then, 2015/16 and 2016/17 would go out of date and be lost.  2017/18 would be payable but would cost £907.40.

If you are planning to move abroad and if you will be employed or self-employed then it is likely that you can pay those future years from 2023/24 to 2045/46 voluntarily under Class 2 at (currently) just under £165 per year (a no brainer).  You should have a read of NI38 and complete a form CF83 at the end of NI38 to get yourself set-up.  There is no immediate rush to do that (given the pressures on HMRC at the moment) as nothing will change on that front for the next 24 months.

Then it seems it is convenient for me to buy those years as I would recover the sum in about 3 years after 68 years old. As expectancy of life for someone with my age is 84 years old, it seems I will get much more money in the long term. 

Even if I move abroad, it still convenient. Am I right?

Thank you very much for your help. 

molerat

Yes it is. 

And take note of what pinnks has said about paying the ridiculously cheap class 2 whilst you are overseas. Yes it is true. Effectively, at today's rates, pay in a one off £3.15 and when you retire get £5.29 a year for life.  What's not to like.

giogiu1974

Quick question on this again. In one of those missing years, I’ve received job allowance for about a month. Can I still pay that year as voluntarily contribution or there is something that I need to do before paying?

Marcon

giogiu1974 said:

Quick question on this again. In one of those missing years, I’ve received job allowance for about a month. Can I still pay that year as voluntarily contribution or there is something that I need to do before paying?

Yes you can pay it/no nothing you need to do first.

p00hsticks

Marcon said:

giogiu1974 said:

Quick question on this again. In one of those missing years, I’ve received job allowance for about a month. Can I still pay that year as voluntarily contribution or there is something that I need to do before paying?

Yes you can pay it/no nothing you need to do first.

But if there are a number of NI credits, presumably your NI record will show a lower amount to pay than that that would be required for a full year. 

giogiu1974

p00hsticks said:

Marcon said:

giogiu1974 said:

Quick question on this again. In one of those missing years, I’ve received job allowance for about a month. Can I still pay that year as voluntarily contribution or there is something that I need to do before paying?

Yes you can pay it/no nothing you need to do first.

But if there are a number of NI credits, presumably your NI record will show a lower amount to pay than that that would be required for a full year. 

Am I right that I can now buy these years before April 2025 and the cost will remain the same till then?ive just checked the gov website and still says “ Pay a voluntary contribution of £824.20 by 31 July 2023. This shortfall may increase after 31 July 2023.”

molerat

Yes. 5 April 2023 / 31 July 2023 has now moved to 5 April 2025.