Topping up: Do you *really* need to "phone the Pension Service"?

Sumarokov

I cannot work out if this is something that is a legal requirement or is just a pointless "nannying" exercise, especially because HMRC seems to send out generic replies to letters (while addressing them to the recipient personally).

At the moment I have only 6 full years of contributions, as have been living abroad. I have finally been allowed to make Class 2 (and not Class 3) contributions for missing years. But the letter includes the following:

To find out if your State Pension will increase after you've paid voluntary NICs, you must phone the Pension Service... Due to changes in the law [what law??] you need the Pension Service to confirm whether your State Pension will increase if you pay any shortfall.

What are they trying to actually say? For me it is a non-brainer that paying Class 2 contributions will increase my state pension... unless there is some weird way in which they take your money and then say: sorry, no pension, haha! Which I doubt. Is it because they worry you do not know about the ten-year rule?

I just do not know if this is important or not. Naturally, it is impossible to get through on the phone anyway to the Pension Service. Should I just go ahead and pay? In one of the years, the amount I have to pay is £15.85, in another it is £3.15!

Once, trying to get through to HMRC, I had to first answer "have you checked with the Pension Service that it is worth paying voluntary NICs?" Because I had no wish to be cut off again on the phone (I was using PAYG), I just said "yes". What is with this never-ending insistence that you phone the Pension Service? It is not as if they issue you with a binding statement at their end anyway, is it?

Anyone in the same boat as me?

p00hsticks

There has been a lot of scaremongering and incorrect publicity over this topic in recent years, and as a result there been plenty of cases (reported on this board and elsewhere) where people have paid sometimes considerable amounts (many thousands of pounds) to voluntarily fill in missing years completely unneccessarily - perhaps because they mistakenly believe they need 35 years to qualify for a new state Pension when due to transitional rules they don't, or because they are buying pre-2016 years which won't necessarily increase their forecast, or because they plan on working for many more years until the reach State Pension Age and so have plenty of time going forward to make up any shortfall. 

The requirement to contact the Pension Service first is to ensure that the years people are intending to buy will actually increase their state pension and that they are not wasting their money, as HMRC will not refund any payments that people later realise they have made in error. 

Editted to add: The 'law' referred to is presumably the new State Pension legislation introduced in April 2016, and the associated transitional rules for those who started their working life prior to that date which means it is not straightforward to say how many years would be required for a full state pension - every individual case will be different depending on a persons circumstances. 

Silvertabby

May have changed in the 3 years since I paid my top ups.  When I rang to request my 18 digit payment reference, the chap I spoke to did ask if I had confirmed with the Pension Service if the 4 years I wanted to pay would actually add to my pension - but was happy when I said that I only wanted to pay for post 2016 years/was a retired pensions administrator.

That said, there have been many complaints from people who paid pre 2016 years or part years (because they were cheaper) but who then found that their pensions didn't increase.  Which was all HMRC's fault for taking their money even though HMRC had only followed the pensioner's instructions........  Understandable if they are now insisting on prior confirmation, as saves upsets and extra work all round.

squirrelpie

AFAIK, you only need the payment reference if you're trying to make an electronic payment. If you send a cheque with a covering letter stating "this payment is for years ... for me name, NI etc" then it should work. But in that case you do have to know which years you are allowed to pay and which will be beneficial!

Sumarokov

p00hsticks said:

or because they are buying pre-2016 years which won't necessarily increase their forecast. 

Hi, thanks for responding. I gave you and all other posters a "thanks". Do you know how it can be that pre-2016 years do not increase your pension forecast? I need all the years I can get, especially to get past the "ten-year" mark. Do you mean people who maybe have 35 years already, so it is pointless them paying more? Because surely any additional year is good in terms of pension...

molerat

Sumarokov said:

p00hsticks said:

or because they are buying pre-2016 years which won't necessarily increase their forecast. 

Hi, thanks for responding. I gave you and all other posters a "thanks". Do you know how it can be that pre-2016 years do not increase your pension forecast? I need all the years I can get, especially to get past the "ten-year" mark. Do you mean people who maybe have 35 years already, so it is pointless them paying more? Because surely any additional year is good in terms of pension...

If the 2016 starting amount was based on the old rules then only 30 years are useable, already have 30 then buying more will add nothing.  Unless of course any contracted out deduction was small then buying additional years could switch the calculation to the new scheme.  If the calculation was under the new scheme and reduced by COPE then 35 years are useable, again already have 35 then buying more would not add anything.  Simple eh

Suhusa

Where did you live when you were abroad (and when, if it was an EU country)? You may not have to worry about the ten year mark if you can use your overseas years to get enough contributions together. You'd still be paid, say, only 5 years if that's all you have in the UK, but the 10 year limit would be of no interest to you if your overseas years and UK years total more than 10 years.