NI contribution and early retirement

JonSalji

Hi all, I spent many years working overseas but have been in the UK for 10 years now and paying into the system. I am 40 now and should have my full NI years by the time I am 65. 

If I choose to retire early, say at 60, what do I need to do/how will I pay NI so that I get the full amount at 68?

Is this something I need to think about by the missing years contribution deadline in April 2025?

Many thanks in advance. 

Dazed_and_C0nfused

JonSalji said:

Hi all, I spent many years working overseas but have been in the UK for 10 years now and paying into the system. I am 40 now and should have my full NI years by the time I am 65. 

If I choose to retire early, say at 60, what do I need to do/how will I pay NI so that I get the full amount at 68?

Is this something I need to think about by the missing years contribution deadline in April 2025?

Many thanks in advance. 

What do you mean by "have my full NI years but the time I am 65"?

What number of years do you think you need?

Have you actually checked your forecast to see what you have accrued to date and which years might be available to buy.  If buying any is even worth considering.

JonSalji

Dazed_and_C0nfused said:

JonSalji said:

Hi all, I spent many years working overseas but have been in the UK for 10 years now and paying into the system. I am 40 now and should have my full NI years by the time I am 65. 

If I choose to retire early, say at 60, what do I need to do/how will I pay NI so that I get the full amount at 68?

Is this something I need to think about by the missing years contribution deadline in April 2025?

Many thanks in advance. 

What do you mean by "have my full NI years but the time I am 65"?

What number of years do you think you need?

Have you actually checked your forecast to see what you have accrued to date and which years might be available to buy.  If buying any is even worth considering.

Apologies if unclear, shouldn’t be posting at 1am in the morning!

I will reach 35 years of NI contributions when I am 65. However I am not sure what I need to do if I want to retire at early (e.g. 60), but make sure I gel full state pension when I am 68?

NI contribution comes out of my wages but how do I pay for the 5 years between 60 and 65 if I am no longer getting a salary?

Dazed_and_C0nfused

JonSalji said:

Dazed_and_C0nfused said:

JonSalji said:

Hi all, I spent many years working overseas but have been in the UK for 10 years now and paying into the system. I am 40 now and should have my full NI years by the time I am 65. 

If I choose to retire early, say at 60, what do I need to do/how will I pay NI so that I get the full amount at 68?

Is this something I need to think about by the missing years contribution deadline in April 2025?

Many thanks in advance. 

What do you mean by "have my full NI years but the time I am 65"?

What number of years do you think you need?

Have you actually checked your forecast to see what you have accrued to date and which years might be available to buy.  If buying any is even worth considering.

Apologies if unclear, shouldn’t be posting at 1am in the morning!

I will reach 35 years of NI contributions when I am 65. However I am not sure what I need to do if I want to retire at early (e.g. 60), but make sure I gel full state pension when I am 68?

NI contribution comes out of my wages but how do I pay for the 5 years between 60 and 65 if I am no longer getting a salary?

The 35 years rules probably don't apply to you, they are for people who have only built up a post 2016 NI record.

You might need 35 years but you need to actually check your forecast, in particular the amount you have accrued to date (probably shown to 5 April 2024 at the moment) to have an accurate picture of your own personal position.  The top line will undoubtedly say your forecast is £221.20/week.  It's what's after that that is important.

If you don't earn enough to add a qualifying year (paying NI isn't necessary, earning at the Lower Earnings Limit (LEL) is what counts and that is currently £123/week) then you can make voluntary contributions to add additional years.  Currently it would cost ~£900 to add a year where you haven't got any qualifying weeks.

But without doubt the best thing you can do now is to understand what your personal situation is.

Bobziz

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

molerat

35 years is of no relevance to those with a pre 2016 history, you may need 35 but it could equally be more or less.

The first thing to do is get a pension forecast https://www.gov.uk/check-state-pension, the on line version is preferable.

That will give you a top line amount of how much you can get paying NI going forward to retirement.  If that states £221.20 then that is good as you can make the full pension without looking back.

The second amount will be how much you have currently built up as at April 2024.  That cannot be taken away from you and will be what you will get, plus annual inflationary increases, if you stop contributing now.

It will then tell you how many more years you need to contribute to get that top line amount.  You need to check if that is up to the wire or gives a breathing space.

If that top line amount is not the full amount there will be another figure you can get to buying past years.  If this is the case then it needs urgent attention as years 18-19 and earlier will cease to be available from Apr 25.

You could also check your NI record to see if there are any part filled cheap gaps which could be useful if going forward you are up to the wire.

If you retire early you can buy necessary years with class 3 contributions which are currently £907.40 then £923 for 25-26 and increasing with CPI each year.