Calculating NI shortfall

misuel1955

I left the NHS in 2015 at age 59 and took my NHS Pension after over 40 years service. This was my only income so why does HMRC keep telling me that if I need to pay any NI shortfall to top up my state pension appears to be based on my salary when I left the NHS. Why can I not pay voluntary NI based on the income I was receiving as my pension ie 50% of my final salary? I did not receive my State Pension until 2021 for which I now pay Income Tax

tacpot12

It seems unlikely that HMRC are telling you that your NI shortfall needs to be based on your old NHS salary. How much have they said they want from you per full year?

Ayr_Rage

You can only pay NI on income from employment, not from pension income.

misuel1955

£824.20 per year for the years 2016 to 2020 and £795.60 for 2020/2021

QrizB

misuel1955 said:

£824.20 per year for the years 2016 to 2020 and £795.60 for 2020/2021

That's the current going rate for buying complete years.

Were you expecting some other numbers?

Ayr_Rage

Those amounts are what you need to pay as a LUMP SUM to buy each extra year you may need.

You cannot pay any other way.

misuel1955

It would have been nice to know that I could not pay NI contributions on pension payment. I am not, however, going to pay any shortfall as its a gamble whether I would live long enough to gain

TadleyBaggie

Are you in poor health? The payback period for NI top-up is only around 4 years.

molerat

misuel1955 said:

It would have been nice to know that I could not pay NI contributions on pension payment.

The information is in the public domain.

I am not, however, going to pay any shortfall as its a gamble whether I would live long enough to gain

less than 3 years ?  If you had made up the contributions before 2021 it is likely you would have been in profit by now.

QrizB

misuel1955 said:

It would have been nice to know that I could not pay NI contributions on pension payment. I am not, however, going to pay any shortfall as its a gamble whether I would live long enough to gain

You were 59 in 2015, so will be 67 or 68 now?

Average life expectancy for a 68-year-old is 86 or 88 (male or female), so you can expect to live for another 18-20 years - with a one-in-ten chance of living for another decade after that.

TadleyBaggie

This shouldn't come as a surprise, pretty much covered in the OP's thread from 2019.

https://forums.moneysavingexpert.com/discussion/5964391/national-insurance-con/p1