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How much does voluntary NI top up add to weekly state pension?

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Comments

  • KevinM2
    KevinM2 Posts: 28 Forumite
    Fourth Anniversary 10 Posts
    edited 30 April 2024 at 11:40AM
    Every post-2016 year purchased adds 1/35th of the maximum amount until you reach that maximum - so currently £5.82. 

    Buying 5 additional years would take your forecast amount from £172.14 to   £201.24. As you can't make voluntary contributions to take you over the maximum amount, then purchasing the sixth year would only add the final £2.61 to take you to £203.85 
    Hi,

    Sorry to bring this up again, but you say that each post 2016 year adds £5.82 (probably higher now we are into the new tax year)...but can I ask how much a pre-2016 paid year adds to the state pension per week please?

    We were just checking, and my wife (who started drawing her state pension last year) has the opportunity to buy incomplete years from 2006 to 2016...I just wondered how much extra she would get per week if she bought a couple of extra years (2008 and 2009 are the best value at £158 and £665 to buy them)...all other years up to 2016 are £824...

    P.S. My wife currently has 35 Full Years (I can't see, but I assume it's an opted out NI contribution pension) between 1970 and 2005, and currently gets about £173 per week... 

    Thanks so much,
    Kevin
  • KevinM2 said:
    Every post-2016 year purchased adds 1/35th of the maximum amount until you reach that maximum - so currently £5.82. 

    Buying 5 additional years would take your forecast amount from £172.14 to   £201.24. As you can't make voluntary contributions to take you over the maximum amount, then purchasing the sixth year would only add the final £2.61 to take you to £203.85 
    Hi,

    Sorry to bring this up again, but you say that each post 2016 year adds £5.82 (probably higher now we are into the new tax year)...but can I ask how much a pre-2016 paid year adds to the state pension per week please?

    We were just checking, and my wife (who started drawing her state pension last year) has the opportunity to buy incomplete years from 2006 to 2016...I just wondered how much extra she would get per week if she bought a couple of extra years (2008 and 2009 are the best value at £158 and £665 to buy them)...all other years up to 2016 are £824...

    Thanks so much,
    Kevin
    Difficult to say without any details about your wife's current entitlement.
  • KevinM2
    KevinM2 Posts: 28 Forumite
    Fourth Anniversary 10 Posts
    edited 30 April 2024 at 11:54AM
    KevinM2 said:
    Every post-2016 year purchased adds 1/35th of the maximum amount until you reach that maximum - so currently £5.82. 

    Buying 5 additional years would take your forecast amount from £172.14 to   £201.24. As you can't make voluntary contributions to take you over the maximum amount, then purchasing the sixth year would only add the final £2.61 to take you to £203.85 
    Hi,

    Sorry to bring this up again, but you say that each post 2016 year adds £5.82 (probably higher now we are into the new tax year)...but can I ask how much a pre-2016 paid year adds to the state pension per week please?

    We were just checking, and my wife (who started drawing her state pension last year) has the opportunity to buy incomplete years from 2006 to 2016...I just wondered how much extra she would get per week if she bought a couple of extra years (2008 and 2009 are the best value at £158 and £665 to buy them)...all other years up to 2016 are £824...

    Thanks so much,
    Kevin
    Difficult to say without any details about your wife's current entitlement.
    Sorry I didn't include any details...

    My wife currently has 35 Full Years (I can't see, but I assume it's an opted out NI contribution pension) between 1970 and 2005, and currently gets about £173 per week (£9003 per year)

    Is that enough info, or do you need anything further?

    Thanks
  • molerat
    molerat Posts: 34,755 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 30 April 2024 at 12:52PM
    At 2024 rates a pre 2016 year can add £6.32, £5.65 or £0.00 depending on personal circumstances.  How many full pre 2016 years does she have ? If already in excess of 30 then they would most likely add nothing.
    Current 2024 weekly £££.pp amount ?
    Number of pre April 2016 NI years full ?
    Number of post April 2016 NI years full ?
    Years which show not full ?

  • KevinM2
    KevinM2 Posts: 28 Forumite
    Fourth Anniversary 10 Posts
    molerat said:
    At 2024 rates a pre 2016 year can add £6.32, £5.65 or £0.00 depending on personal circumstances.  How many full pre 2016 years does she have ? If already in excess of 30 then they would most likely add nothing.
    Current 2024 weekly £££.pp amount ?
    Number of pre April 2016 NI years full ?
    Number of post April 2016 NI years full ?
    Years which show not full ?

    Ah, thanks for that...I didn't realise that there was a difference for pre-2016 years.

    All of her 35 full pension years are pre-2016 (1970-2005 inclusive), and she has no complete pension years from 2006 onwards, and gets £173 per week as of April 2024...

    Sounds like buying years (2006 to 2016) won't make any difference, and obviously won't be worth the outlay then...

    Thanks!
  • xylophone
    xylophone Posts: 45,667 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    My wife currently has 35 Full Years (I can't see, but I assume it's an opted out NI contribution pension) between 1970 and 2005, and currently gets about £173 per week (£9003 per year)


    https://www.gov.uk/check-national-insurance-record

    There seems to be some confusion here.

    Are you indicating that your wife turned 66 last year?

    "Contracting Out" of SERPS/S2P (Additional State Pension)  was possible between 1978 and 2016 (2012 for DC Schemes).

    Is your wife in receipt of a personal or occupational pension?


    Her "starting amount" was the higher of 


    QY (max 30)/30 x £119.30 (full Basic SP) + (Additional State Pension - ( if applicable) Deduction for Contracting Out).


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


    On the basis that she had 35 QY at 5/4/16 she must have had a substantial COPE. 








  • KevinM2
    KevinM2 Posts: 28 Forumite
    Fourth Anniversary 10 Posts
    edited 30 April 2024 at 1:59PM
    So sorry for causing any confusion...

    Yes, my wife is over 66 (she's 68 now) and started drawing her state pension last year...

    She finished work in 2004 at age 50 and took her private pension at that time (she could take it at 50 back then)...she thought she was going to be able to access her state pension at 60 back when she took the VR package from work in 2004, but if she had know she wouldn't be getting her state pension until 67, she would not have taken the VR package...but that's a whole different story! LOL

    Anyway, she has 35 full years of state pension contribution, and is currently in receipt of it, and she also has a small private pension, which is about £7000 per year...so she gets £173 per week from her state pension, and nets about £420/month from her private pension (she gets taxed on her private pension)...

    So, basically, it sounds like she won't get any benefit from buying added years on her state pension, even though she "only" gets £173 per week from her 35 full years of contributions...

    I hope this didn't confuse you any further! :)

    Thanks...
  • molerat
    molerat Posts: 34,755 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 30 April 2024 at 2:27PM
    Post 2016 years will add £6.32 per week and take, £824 / £6.32, 130 weeks to return the capital gross.  Equivalent to a 39.9% index linked single life annuity - can you get that on the open market ?  Topping up SP is excellent value for money, virtually nothing else beats it !
  • Audaxer
    Audaxer Posts: 3,547 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    KevinM2 said:
    So sorry for causing any confusion...

    Yes, my wife is over 66 (she's 68 now) and started drawing her state pension last year...

    She finished work in 2004 at age 50 and took her private pension at that time (she could take it at 50 back then)...she thought she was going to be able to access her state pension at 60 back when she took the VR package from work in 2004, but if she had know she wouldn't be getting her state pension until 67, she would not have taken the VR package...but that's a whole different story! LOL

    I'm not sure whether buying any extra years will increase her SP, but surprised she had to wait until 67 to get her SP as the current age is still 66. Did she defer it for a year?
  • Silvertabby
    Silvertabby Posts: 10,202 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 1 May 2024 at 1:01PM
    KevinM2 said:
    So sorry for causing any confusion...

    Yes, my wife is over 66 (she's 68 now) and started drawing her state pension last year...

    She finished work in 2004 at age 50 and took her private pension at that time (she could take it at 50 back then)...she thought she was going to be able to access her state pension at 60 back when she took the VR package from work in 2004, but if she had know she wouldn't be getting her state pension until 67, she would not have taken the VR package...but that's a whole different story! LOL

    Anyway, she has 35 full years of state pension contribution, and is currently in receipt of it, and she also has a small private pension, which is about £7000 per year...so she gets £173 per week from her state pension, and nets about £420/month from her private pension (she gets taxed on her private pension)...

    So, basically, it sounds like she won't get any benefit from buying added years on her state pension, even though she "only" gets £173 per week from her 35 full years of contributions...

    I hope this didn't confuse you any further! :)

    Thanks...

    5 years of post 2016 contributions will take your wife up to the full nSP.  As molerat says, there's no (safe) investment that can beat this return. 

    But, if you are going to do it, don't dawdle - as your wife is past SPA the increase will only be applied to her pension from the date of the payment, and not backdated to her SPA. 
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