State pension NI contributions confusion

Audaxer

AlanF said:

Ultimately the shortfall isn't massive (£13 per week) so there's a limit to how much capital we would want to throw at maximising it.

As paying 2 years will get an extra £11.64 per week, it really is a no-brainer to pay these 2 years NI, especially as one of the years is only going to cost you £261.80.  

As paying a 3rd year will only increase her pension by £1.23 per week to get to the maximum, I'm not sure that is worth it, but up to you and your wife.

AlanF

Apologies for the delays in acknowledging the helfpul comments, been away from home and trying to use mobile is so fiddly!

Thanks so much to everybody for the help - it really is complicated, and I very much appreciate the lengths people have gone to to explain.

Just to clarify, the wording on the forecast is "forecast if you contribute another three years is £185.15 (the maximum). 

However, Audaxer and AF1963 (username took me by surprise - my own initials and year of birth!!) have suggested that buying 2 years rather than 3 (the third being relatively less profitable as she can't go above maximum) would be worth considering, especially as one of those two years is relatively cheap at £261.80 because it is a part year.

Jem16 has suggested to pick the part payment year (2021-2) and then to pick the year with the least payment, but my understanding is that all the years since are listed as 'full years' on the forecast (see screenshot below), then the second year would have to be a year moving forwards (2022-3 or later)?

So just to clarify, if she were to pay the outstanding balance on the 2021-22 year, and then buy a second year in full, she would recoup £11.64 per week (index-linked)?

Many thanks

Alan

molerat

So just to clarify, if she were to pay the outstanding balance on the 2021-22 year, and then buy a second year in full, she would recoup £11.64 per week (index-linked)?

Yes.  And the cheapest second year would be 22-23 at £824.20 which is available at that price until April 2025..  Whether she wants to do that or wait until nearer state retirement to avoid the risk of wasting - getting run over by a bus -  it is the only factor to consider.  After April 25 the cheapest year would be 23-24 at £907.40.

Dazed_and_C0nfused

A third year will just add the final £1.22/week so although it will increase, as things stand, with the triple lock it will take significantly longer to recoup compared to the first two years.

£63.44/year to start so maybe 10-12 years after inflation increases.

AlanF

Thanks again molerat and Dazed_and_Confused - really helpful. She will definitely buy the missing part year (but not until April 2024 as the price appears fixed until then so no point buying earlier!) and almost certainly the 2022-3 year (at present the gov.uk forecast sight still shows "your record for this year is not available yet" but as she has been retired, there won't be any contributions, so I presume the £824.40 listed above is a 'standard' sum for that year?).
Alan

GunJack

AlanF said:

Thanks again molerat and Dazed_and_Confused - really helpful. She will definitely buy the missing part year (but not until April 2024 as the price appears fixed until then so no point buying earlier!) and almost certainly the 2022-3 year (at present the gov.uk forecast sight still shows "your record for this year is not available yet" but as she has been retired, there won't be any contributions, so I presume the £824.40 listed above is a 'standard' sum for that year?).
Alan

in a word, yes