Is it too late to pay voluntary NI once you are in receipt of state pension.

Tightboy

An ex colleague of mine who turned 66 last July is receiving a reduced state pension as they stopped working in approximately 2010. I’ve been trying to find out if they can still top up their NI contributions from 2010 onwards to get their state pension increased? Prior to this they had worked full time since the age of 18 for established companies so would have had built up many years of full NI contributions. Unfortunately, this person isn’t on-line so cannot log in to the G’mnt site to check…

molerat

Yes they can, they have exactly the same timescales as those who have not yet reached retirement.  They would need to contact The Pension Service for information on what they would need to buy which is sent in the post, not sure on how long they are taking at the moment.  https://www.gov.uk/contact-pension-service

Tightboy

Thanks for your reply I have just left them a voicemail.

xylophone

 I’ve been trying to find out if they can still top up their NI contributions from 2010 onwards to get their state pension increased? 

You have indicated that your friend worked full time from age 18 to age 54.

He retired in 2010.

It would appear then that he had at least 36 Qualifying Years when his starting amount for NSP was calculated in 2016.

It was the higher of

Old Rules

QY/30 (max) x £119.39 (Full Basic) + (Additional State Pension - Deduction for Contracting Out).

New Rules

{QY/35 (max) x £155.65 (Full NSP)} - Contracted Out Pension Equivalent.

If so, then only contributions for years 16/17 to 21/22 will improve his pension.

His starting amount will have been index linked between 2016 and when he took it just as it is now when in payment.

See page 6 here (produced at inception of NSP)

https://www.dpf.org.uk/explorer/files/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

https://www.gov.uk/voluntary-national-insurance-contributions

Tightboy

Thanks Xylophone, I will print that flowchart out for them. 

xylophone

Also print out the gov guidance - he should note particularly

How and when to pay

If you want to make voluntary contributions for the tax year 2016 to 2017, the deadline has been extended. You have until 31 July 2023 to pay.

t0rt0ise

Also the increase to his pension will be from the date he pays and will not be backdated so he should pay as soon as possible.

Tightboy

t0rt0ise said:

Also the increase to his pension will be from the date he pays and will not be backdated so he should pay as soon as possible.

Ah.. good point, I will let them know, many thanks.