Voluntary NIC contributions - yay or nay?

Cousin_Livvy

Hello all! 

I'm currently a graduate student with part-time work (tutoring, consulting, etc). In the last two years, I have not passed the threshold to pay NIC/tax (most of my income still comes from my funding body). 

I am just wondering whether I should make the choice to pay £824.20 by 5 April 2029, and then £907.40 by 5 April 2030. 

It seems to suggest that I currently am forecast to get the maximum state pension - would I then be better served taking that money and putting it into my considerably more generous private pension fund with work?

MeteredOut

If you expect to get the maximum state pension via NI contributions after you graduate then, yes, there's little point in putting in that £1700+.

But, no-one can predict the future.

So, it'll depend on your age, how many years NI you've already contributed, how many you'll need to contribute, what you expected your future working life to look like and your attitude to risk. Not all in equal measures.

molerat

Without further information on your age and what you intend to do for the rest of your working life no one could give any sort of sensible answer.

Cousin_Livvy

MeteredOut said:

If you expect to get the maximum state pension via NI contributions after you graduate then, yes, there's little point in putting in that £1700+.

But, no-one can predict the future.

So, it'll depend on your age, how many years NI you've already contributed, how many you'll need to contribute, what you expected your future working life to look like and your attitude to risk. Not all in equal measures.

Thank you for the reply. The short of it is: 

- I am in my late twenties 
- I may well leave the UK for many years at a time soon, as I am a researcher. In this time, I hope to maintain some UK freelance work (enough to maintain tax residency for other reasons) 
- I have only five years under my belt as 'full years' 
- It is likely that I will work at least another five years in the UK over the course of my lifetime
-I have a fairly low risk appetite, but would be willing to consider better long-term options.

p00hsticks

If you will potentially be working abroad then under the current rules you'll have the opportunity to make voluntary Class 2 contributions while there, which are considerably cheaper than Class 3. 

In your position I wouldn't be spending anything at present.

Even the gaps you have aren't the ones people are panicking about whether to fill or not before the april 2025 deadline closes - you have plenty of time to revisit in a few years ....

leedsathens

Hello, 

I would love advice regarding a question similar to Livvy's. I'm 38, have 14 years of NIC contributions towards the state pension, 7 years in the Teachers' Pension Scheme and since 2021 have been working in Greece contributing to the Greek state pension through insurance contributions here. 

I had three years of UK NIC gaps and the option to pay voluntary contributions to fill those gaps (costing between £158 and £179 if I pay before April 5th 2025). I paid for one of these years, but am now wondering if I should pay the others now or wait until later. I'm not sure if I'm going to stay in Greece or return home (probably the latter). Should I pay them while the cost of those years is low? 

As a side note, I'm starting to research other ways I can save for my future/retirement. It's not possible to pay into a UK private pension scheme as I'm not currently a UK resident or taxpayer. 

Thank you for your help.
 

MeteredOut

leedsathens said:

Hello, 

I would love advice regarding a question similar to Livvy's. I'm 38, have 14 years of NIC contributions towards the state pension, 7 years in the Teachers' Pension Scheme and since 2021 have been working in Greece contributing to the Greek state pension through insurance contributions here. 

I had three years of UK NIC gaps and the option to pay voluntary contributions to fill those gaps (costing between £158 and £179 if I pay before April 5th 2025). I paid for one of these years, but am now wondering if I should pay the others now or wait until later. I'm not sure if I'm going to stay in Greece or return home (probably the latter). Should I pay them while the cost of those years is low? 

As a side note, I'm starting to research other ways I can save for my future/retirement. It's not possible to pay into a UK private pension scheme as I'm not currently a UK resident or taxpayer. 

Thank you for your help.
 

What does your online statement say with regards to how many more years you need, and are you likely to do that via your work in future?

Since Class 2 contributions are (currently) £179.40 for the year, unless you know for sure you'll get the necessary NICs in future, I'd be tempted to pay the £158-£179 if I were in your shoes.

You may want to start a separate thread regarding other ways to save for future/retirement whilst not resident in the UK.

leedsathens

Thank you, Metered Out! I also think that's the best option. Just needed some reassurance.

I'll definitely start another thread re the second point.