Additional NICs payment to pay for missing years

Dovedale_Ranger

In November 2022 I asked for a printout of my NI record. It arrived a couple of weeks later. Attached to the covering letter was a form to pay for missing years (which I had).  After seeing Martin’s programme, it reminded me to send the form in (on the 24th of Feb 2023) with a cheque covering 4 additional years. (The reason I chose the 4 years I did was because they originally had a deadline for being paid of Apr 2023. I also thought I might pay one more year before the end of 2023, when I had the spare funds.) The form was received (according to HMRC) on the 16th of Mar 2023. The money left my bank account on the 21st of Mar 2023.

Last week I checked for the umpteenth time to see if the years had been added to my NI record, and finally 4 years have been added. Unfortunately, 3 of the years are different from the ones I ticked on the form. I had ticked 2013/14, 2014/15, 2015/16, and 2016/17, but instead they show the additional payments against 2016/17 (which is correct) and 2017/18, 2018/19 and 2019/20. Oddly HMRC still show my form is “In Progress”?

Has a similar thing happened to anyone else, and will HMRC correct it when the form has been finally checked? (When I checked online as to when can I expect a reply it said by November 2023, and they’re currently processing forms from Sep 2022!)

molerat

Are you sure that the pre 2016 years would add to your pension, maybe they have done you a favour.

How many full pre 2016 years do you currently hold ?

Can you post up your full forecast and someone will sense check it for you.

Current weekly £££.pp amount accrued up to April 2022 (or 2023 as some have been updated)
Number of pre 2016 NI years full
Number of post 2016 NI years full
Tax year you reach state retirement
Any COPE amount shown, in a click link in "You've been in a contracted-out pension scheme" if there is one.
Years which show not full and prices

Dovedale_Ranger

I retired early in Jul 2012 and had 40 full years in public service, and now receive a works pension.. So I calculated I needed to pay for 5 more years to get close to the full state pension. My estimate (before the 4 years were added) was £143.33 a week and the forecast was £148.62 (if I contributed to the 5th of Apr 2023. It also said I could improve my forecast to £180.36 a week. Now the 4 years have been added the estimate is £181.10 a week, and the forecast £186.92 and the most I can increase it to is £198.57.

Dovedale_Ranger

Sorry, forgor to add that I will receive the state pension at the end of October this year.

p00hsticks

Dovedale_Ranger said:

I retired early in Jul 2012 and had 40 full years in public service, 

In that case, they definitely have done you a favour, as only post 2016 years would increase your state pension, so three of the four years you've requested would be money straight down the pan. 
 
This is why they emphasise that you should speak to the Future Pensions Service first , to check which years will actually increase your pension, as pre-2016 ones don't always - and in your case, definitely won't.

You need to hope that the years bought remain as currently allocated rather than those you actually requested, as the 'error'  definitely works in your favour. HMRC take the payments but have no knowledge of how it impacts your state pension forecast, if at all. However, I wonder if they may have adopted the approach that, if pre-2016 years are requested and post-2016 years are also available, they'll use them instead as they are far more likely to result in a boosted forecast.

As far as I'm aware HMRC are under no obligation to refund contributions made voluntarily if they don't actually increase your pension, unless you can show that you were wrongly advised of the years to buy by the FPC.  

Dovedale_Ranger

Why don't payments before 2016 count, as I was born in 1957?

molerat

With a contracted out pension it is highly unlikely that years 2015-16 and earlier would have added to your pension.

With £143.33 at 2022 figures you needed 8 more years to reach the max then £185.15 which was unachievable for you.

That £143.33 is worth £157.80 at 2023 amounts

You have added 4 more years to that taking you to £181.10

You have 3 more years available to you.  22-23 will take you to £186.92 and with 20-21 and 21-22 added will take you to your max achievable £198.57, £5.28 short of the max new pension.

HMRC acted correctly in ignoring your instructions saving you wasting your money.

Why don't payments before 2016 count, as I was born in 1957?

Simply the way the system works.  With a contracted out pension your higher starting amount would have been under the old rules, rather than the new, where you could only use a maximum of 30 years for basic pension purposes - the full pension was £119.30 / 30 for each year.  Once you hit that 30 years no more could be added.

Dovedale_Ranger

Sorry, just found the answer online (but it wasn't clear on the HMRC form).

Sarahspangles

Dovedale_Ranger said:

Oddly HMRC still show my form is “In Progress”?

When I checked online as to when can I expect a reply it said by November 2023, and they’re currently processing forms from Sep 2022!

It’s possible that in November they’ll write to you to say “What Molerat said”.

p00hsticks

molerat said:

With a contracted out pension it is highly unlikely that years 2015-16 and earlier would have added to your pension.

With £143.33 at 2022 figures you needed 8 more years to reach the max then £185.15 which was unachievable for you.

That £143.33 is worth £157.80 at 2023 amounts

You have added 4 more years to that taking you to £181.10

You have 3 more years available to you.  22-23 will take you to £186.92 and with 20-21 and 21-22 added will take you to your max achievable £198.57, £5.28 short of the max new pension.

HMRC acted correctly in ignoring your instructions saving you wasting your money.

Why don't payments before 2016 count, as I was born in 1957?

Simply the way the system works.  With a contracted out pension your higher starting amount would have been under the old rules, rather than the new, where you could only use a maximum of 30 years for basic pension purposes - the full pension was £119.30 / 30 for each year.  Once you hit that 30 years no more could be added.

And even if the OP's starting amount had been that from the new rules, the new rules only use a maximum of 35 years, so with 40 pre-2016 years under their belts there is no way that filling any further pre-2016 gaps would result in an increase....