State pension NI contributions

PBpete

I semi-retired at 60 years old on my teachers' pension, but have continued a little bit of consultant work and pay tax via self-assessment. I made 41 years of full National Insurance contributions and can get my state pension at 66. However, the estimate on pension checker is saying I will get £163.30 a week unless I pay additional contributions. Is that correct? So even though I have paid 41 years I still get deducted for not paying national insurance contributions for the final five years of very much part-time work?

eskbanker

Yes, 41 years doesn't guarantee a full state pension (there's no 'deduction' as such, you just haven't earned it), but your full NI history will show how much it would cost to pay voluntary contributions to bring you up to the maximum.

molerat

You don't get anything deducted for not working, you didn't earn it in the first place because you were in a contracted out pension. Are you registered as self employed as you could pay class 2 at around £160 per year

xylophone

See

https://forums.moneysavingexpert.com/discussion/comment/79949497#Comment_79949497

Linton

You get a reduced State Pension because you were contracted out of SERPS/S2P whilst being a member of a DB pension scheme and so paid reduced NI.  The new SP in 2016 effectively merged the SERPs component into the main pension (it's more complicated than that but at the top level that was the objective).

Under the pre-2016 rules you would not have been able to get a higher SP by paying extra contributions.  Under the post-2016 rules you can gain extra SP up to the current standard level by paying for extra NI years, so you are a winner.  You aren't deducted money by not paying NI, you gain by more than you would otherwise be entitled to by paying extra.

Paying for extra NI years is an unbelievably good deal since you recoup the costs of voluntary NI in 3-4 years of extra SP.  

GrubbyGirl_2

I worked for the NHS and was therefore contracted out from 18 to 60 when I retired.  As a result I need 48 years NI to get the full £185.15

Audaxer

If your Estimate of your NI Record is £163.30, the good news is that by paying another 4 years NI voluntary payments, it will take you up to £184.46, which is very near to the current maximum of £185.15. It is definitely worth paying these voluntary payments as you will recoup that money within 3 to 4 years of receiving your State Pension.

Many people including myself, who were contracted out, are paying voluntary contributions to get up to the maximum. I need to get to 49 years of full contributions to get to the maximum, so you are not doing too bad as you only need 45 years.