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N.I. Voluntary Contributions Calculation
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seasickmick
Posts: 10 Forumite

I retired in 2011 on an Occupational Final Salary Pension (contracted out) since when I have not made any further NI payments. I'm aware that it's possible to pay some additional contributions to increase my NSP however like many others I have been unable to contact the Future Pensions Team to explore my options.
Which years shortfalls can I buy back ie only post 2016, pre 2016 or any?
What would it cost in total to maximize my NSP?
When would be the best time to buy back contributions – should I wait until closer to my state pension age?
In practical terms how do I go about buying back contributions – is the only route through the Future Pensions Centre?
Estimate based on your National Insurance record up to 5 April 2022
£148.32 a week
Forecast if you contribute until 5 April 2027
£174.77 a week You can improve your forecast
You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.
The most you can increase your forecast to is
£185.15 a week
You have:
36 years of full contributions (All Pre 2016 – No Post 2016 contributions)
5 years to contribute before 5 April 2027
10 years when you did not contribute enough
COPE estimate is £78.41 a week
Years with no NI contributions and cost of shortfalls
2012-13 until 2019-20 - £824.20 for each year
2020-21 - £795.60
Thanks for bearing with me.
If anyone can help the questions I have are-
Am I entitled to pay for previous years contributions even though I was in a “contracted out” occupational pension?
If yes to the above, how much extra NSP would I get for each year of additional voluntary contributions?Which years shortfalls can I buy back ie only post 2016, pre 2016 or any?
What would it cost in total to maximize my NSP?
When would be the best time to buy back contributions – should I wait until closer to my state pension age?
In practical terms how do I go about buying back contributions – is the only route through the Future Pensions Centre?
The following information is from my State Pension Summary
You can get your State Pension on 21 September 2027
You need to continue to contribute National Insurance to reach your forecast Estimate based on your National Insurance record up to 5 April 2022
£148.32 a week
Forecast if you contribute until 5 April 2027
£174.77 a week You can improve your forecast
You have shortfalls in your National Insurance record that you can fill and make count towards your State Pension.
The most you can increase your forecast to is
£185.15 a week
You have:
36 years of full contributions (All Pre 2016 – No Post 2016 contributions)
5 years to contribute before 5 April 2027
10 years when you did not contribute enough
COPE estimate is £78.41 a week
Years with no NI contributions and cost of shortfalls
2012-13 until 2019-20 - £824.20 for each year
2020-21 - £795.60
2021-22 – 800.80
0
Comments
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You need 7 more years of contributions to reach £185.15You can only purchase years 2016-17 and later. Any before that date will not add to your pension.6 years will add £5.29 each taking you to £180.06, the 7th adding £5.09 taking you to £185.15.You have 5 years going forward and 6 (useable) past year gaps.The prices shown for the majority of those years, 2020-21 and earlier. will increase to £907.40 from August and increase with inflation every April..HMRC are very wary of giving you a reference to pay without first contacting FPC. You could always pay with a letter and cheque.1
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You could always pay with a letter and cheque.
See
https://www.gov.uk/pay-voluntary-class-3-national-insurance/by-post#:~:text=Pay voluntary Class 3 National,through the post - GOV.UK
P6 here (booklet produced to coincide with introduction of NSP 6/4/16) may be of interest.
https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
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molerat said:You need 7 more years of contributions to reach £185.15You can only purchase years 2016-17 and later. Any before that date will not add to your pension.6 years will add £5.29 each taking you to £180.06, the 7th adding £5.09 taking you to £185.15.You have 5 years going forward and 6 (useable) past year gaps.The prices shown for the majority of those years, 2020-21 and earlier. will increase to £907.40 from August and increase with inflation every April..HMRC are very wary of giving you a reference to pay without first contacting FPC. You could always pay with a letter and cheque."Thank you" Molerat for the information above, I really appreciate those people who take the time to share their knowledge on the MSE forums.To clarify a couple of points -If I had the means now to make up (6) previous years contributions it would be beneficial doing so before April and the annual NSP increase?If I didn't have the means to buy back all 7 years immediately would it be permissible to buy back say 3 years contributions now and make further "installments" in the future for the remaining 4 or so years (all be it at an increased price) ?Going forward could I elect to pay NI payments monthly from my occupational pension to offset some of the NI shortfall?Thanks again for your reply.
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You can pay what you like when you like as long as the year is showing as available on your NI record.This April's increase has been deferred until August because of the problems getting in touch with the relevant departments. Each year stays at its in year price until 2 years after the end of the year so for instance 2020-21 stays at £795.60 until April 2023 (although deferred until 31 July) then increases to the price of the year at that time which will be £907.40. It then increases in line with the current year price until it ceases to be available 6 years after the end of the year which will be April 2027. This April (again deferred until 31 July) 2016-17 ceases to be available.So if you want to pay for a few years start with the cheapest in order so 20-21, 21-22 then 2016-17 as that ceases to be available first - gives you the maximum options - working from oldest to newest. 2022-23 will be available after April until April 2025 for £824.20. You can set up a direct debit to pay for future years. https://www.gov.uk/pay-voluntary-class-3-national-insurance/direct-debit
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seasickmick said:molerat said:You need 7 more years of contributions to reach £185.15You can only purchase years 2016-17 and later. Any before that date will not add to your pension.6 years will add £5.29 each taking you to £180.06, the 7th adding £5.09 taking you to £185.15.You have 5 years going forward and 6 (useable) past year gaps.The prices shown for the majority of those years, 2020-21 and earlier. will increase to £907.40 from August and increase with inflation every April..HMRC are very wary of giving you a reference to pay without first contacting FPC. You could always pay with a letter and cheque.To clarify a couple of points -Going forward could I elect to pay NI payments monthly from my occupational pension to offset some of the NI shortfall?Thanks again for your reply.
Pay voluntary Class 3 National Insurance: Direct Debit - GOV.UK (www.gov.uk)
A couple of notes;
1 - That link has the current year as 2022-23, it's so late in the tax year now they'd set one up to start for next year 2023-4
2. Although the DD is monthly, they take for whole weeks at a time - so (I think) four weeks in April and May and then five weeks in June (or possibly 5/4/4, I can;t remember the order).
You just need to remember to cancel the direct debit when yo uhave the requisite number of years ......1 -
Thank you all for the detailed replies and links - I think I now have all the information I need to make a decision on buying back previous years NI contributions - now just need to get through to the "Future Pensions Team"!
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Got through to the "Future Pensions Team" first try at 08.00hrs this morning. . Very helpful and confirmed Molerats figures to the penny (see previous posts). After confirming all the numbers very nice lady passed me through to HMRC (2 minute wait) and was issued with a reference number and account details for making a direct bank payment.Thanks again everyone for your assistance in this matter.4
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