Increasing State Pension by paying voluntary Class 3 NI

SteelRiver829

Hello everyone,

I am posting my experience of the process of paying voluntary Class 3 NI contributions to fill empty years to top up my State Pension.                                                                                           I hope that my experience may be able to help anyone else thinking of doing the same thing.

I retired from the Fire Service after 30 years’ service in late 2010 at the age of 52. I didn’t pay any more NI contributions after that, and my NI record showed empty years between 2011 and 2024.   I reached the state retirement age earlier this year aged 66.

Although I had 37 qualifying NI years, because I had been contracted out for 30 of those years, I received a reduced State Pension of around £176 per week, compared to the full amount of £221.20 per week.

After reading Martin’s article about paying voluntary Class 3 NI to top up your State Pension, I decided to contact the Pension Service to see about paying voluntary NI contributions.

The article does need updating, because the Pension Service do not now give you any information over the telephone. Instead, they log your request and then pass it on to another department that will send you a letter that is tailored to your individual circumstances.               They said that I should receive the letter after about 10 days. It actually took nearly two months. Probably due to the numbers of people doing the same thing as me.

The letter told me that by filling eight of the empty years, I could increase my State Pension to the full amount. They advised me that only the years after April 2016 would count towards my State Pension, so there was no point in filling the years between 2011 and 2016.                                     In the end I decided to fill seven years between 2016 and 2023 at a cost of £5717.40.                This increased my State Pension to £220.38.                                                                                    I didn’t bother with the eighth year because it only gave me an extra 82 pence per week, and it would take me over 21 years to recoup the cost of paying for the extra year.

I then contacted HMRC to get the 18-digit number starting with 60, that is needed to make voluntary Class 3 NI payments. I found the easiest way to contact them was via their webchat service on the GOV.UK website National Insurance: general enquiries, Ask HMRC online.             It does start with an automated service, but if you type in, speak to an adviser a couple of times, it will put you in the queue to speak to an adviser. It took me about five minutes or so, before I reached an adviser.

They then ask you what you are wanting to do, and after answering their security questions if you tell them which empty years you are wanting to fill and ask them how much it will cost? They may volunteer the 18-digit reference number that you will need to make the payment to HMRC, otherwise just ask for it and they will give it to you. They also give you their bank account details.

After making the payment I contacted HMRC a few days later to confirm that they had received the payment. Again, via HMRC online. They confirmed that they had received the payment and if I confirmed the years that I wanted to fill, they could allocate the payment for those years there and then. When I checked my NI record afterwards, it did indeed show the extra years that I had bought as full years.

I know that I have rambled on a bit, but I just thought that my experience may be of some help.

flaneurs_lobster

That's useful, thanks for sharing.

Have you started to receive your increased pension payments? I never believe that all the admin has been locked into place until money has actually reached my bank account.

Silvertabby

It's much easier - and thus faster - to make these payments before you reach State pension age.  I bought the 4 years I needed 6 months before my SPA.

If you do leave it until after you reach SPA, then the increase is only backdated to your date of payment, not SPA.

molerat

And a reminder for all those out there that haven't got round to it yet, the countdown has begun.  Less than 8 months to go before all those years 2006-07 to 2018-19 are lost forever.  I don't know how flexible HMRC / DWP will be this time over dates of enquiring / applying being used as the defining point of the application process as you have already had a 2 year extension for the majority of those years.

p00hsticks

SteelRiver829 said:

After reading Martin’s article about paying voluntary Class 3 NI to top up your State Pension, I decided to contact the Pension Service to see about paying voluntary NI contributions.

Welcome to the forum, and thanks for sharing.

For other readers, the article in question is here
How to buy voluntary national insurance contributions (moneysavingexpert.com)

 SteelRiver829 said:

The article does need updating, because the Pension Service do not now give you any information over the telephone. Instead, they log your request and then pass it on to another department that will send you a letter that is tailored to your individual circumstances.       

I think it has always been the case that if you are already over State Pension Age any phone request has to be made to the Pension Service and is passed to a back office to look into further and then write to you as the situation is more complicated once you are eligible for SPA. 

If you are under State Pension Age you call the Future Pension Service instead and they can give you advice on the phone straight away. As @Silvertabby says, the process is much more straight forward if you do it before you reach SPA.

FYI, There is a sub-board to this one specifically for discussion of topping up you state pension 
Topping up your state pension — MoneySavingExpert Forum 

SteelRiver829

flaneurs_lobster said:

That's useful, thanks for sharing.

Have you started to receive your increased pension payments? I never believe that all the admin has been locked into place until money has actually reached my bank account.

No, I haven't started to receive my increased pension payments yet. I only made the payment to HMRC last week.  As I understand it, the increase to my pension is backdated to the date that I made the payment to HMRC, so I'm not particularly concerned if I have to wait for a while for them to start paying me my increased pension.                                          

HMRC did suggest contacting the Pension Service, to check if my new NI record had also been updated on their system. I did as they suggested and got pretty short shrift from the Pension Service for enquiring so soon after my NI record had been updated by HMRC.

I did tell her that it was HMRC's suggestion that I contact the Pension Service. At which point she changed her tone a little, and told me that she would check to see if their system had been updated, and told me that it hadn't and it could be a couple of months or so before I received the increased pension.