Not Currently Planning to Return to Work and Weighing Up Whether to Pay Voluntary NI Contributions

busymumof3

I have been trying without success to get through to HMRC and the Future Pensions Centre to clarify whether it would be worthwhile for me to pay for my missing years NI contributions. I have obtained a state pension forecast online together with the following information. I have the option of purchasing 4 years missing contributions to reach the maximum state pension. I am not currently working and do not plan to return to the workplace.

I would be very grateful for the advice of the experts on this forum.

• Maximum amount of forecast          - £185.15 pw
• Current amount up to April 2022     - £166.45 pw
• Years you have available going forward until you reach State Pension Age      - 10 years 
• Number of full years prior to April 2016     - 35 years
• Number of full years after April 2016          - 0 years 
• Years which are not filled           - 6 years
• COPE is estimated as £23.62 pw

Many thanks.

Dazed_and_C0nfused

If you have no expectation of accruing years via any other method then buying 4 years would be well worthwhile.

But you don't need to rush into it as future years will add the same as any current post 2016 years will.  Although they may be slightly cheaper at the moment.

Be aware that the first three years will each add £5.29/week, taking you to £182.32 and the fourth will add the final £2.83/week.

molerat

You need 4 years of contributions to reach the maximum £185.15.  3 years will each give £5.29 and get you to £182.32 and the 4th gives £2.83 taking you to the max.

At £5.29 per week a year will take 156 weeks to get the outlay back gross.  You have the option to buy back years at between £795.60 and £824.20, the majority of which will be increasing in August to £907.40, the 2023-24 price, or wait a few years and pay for them as they come up by direct debit but obviously at a higher price. Future years effectively cost the same as current as they only increase with inflation.  Buying ahead of time has the disadvantage of once the cash is laid out you have to live long enough to collect, delaying paying is hedging that risk, the extra cost being the insurance premium.

busymumof3

Many thanks to you both. That is extremely helpful.