The Years I Want to Pay are not in HMRC’s “My Options”

Saltrams

I was doing really well. Got my pension forecast, identified what I should do, went to HMRC to do it but instead of just listing all my available gap-years and the option to pay for them, I have 14 options made up of (mostly more expensive) combinations that I don’t want.
Without boring you with the minutiae, I need 3 years pre-2016/7 (of which I have several available) and then another 6-8 more subsequent years (the purchase of which which will be available beyond the 5th April 2025 deadline). Surely it makes sense for me to buy now the 3 years that I need and then add later years when I can afford them? HMRC are not showing this option; it just seems unnecessarily difficult.
Does anyone have any insight/experience/advice about this please?

molerat

Pre 2016 years may not always add to your pension.  Post up some anonymous details and someone will give you all you need to know.  Those 6 simple points tell everything about your history and what you can / need to do.

Current weekly £££.pp amount up to April 2024.
Number of full NI years 15-16 and earlier
Number of full NI years 16-17 and later
Tax year you reach state retirement
Any COPE amount.  If you have "You've been in a contracted-out pension scheme" on your forecast then click
here https://www.tax.service.gov.uk/check-your-state-pension/account/cope whilst logged into your tax account
Years which show not full and prices

Saltrams

Gosh, yet more variables. Thank you for your reply.
Here’s a redacted version of my forecast letter, which hopefully makes things clearer & meanwhile I will try to collate the other things you mention. Yes, I was contracted out & will do as you say. I haven’t paid any contributions (or worked) since 2007, so I don’t have a current weekly NI payment.

So, as you see, they have offered me three years pre 2016/17 but (I’ll take an image from HMRC page) they aren’t making the years available.

Saltrams

I can’t get details of my contracted out-ness. My pay slips pre 2007 are inaccessible and I’d never get the information from my employer before 5th April.
Here’s an example of what I’m being offered:

They just keep offering increasingly more expensive options of years I don’t want to pay for yet. Option 10 includes my period of years but also >6 years that I could buy later, after the current deadline.
🤷🏼‍♀️

molerat

There are limits on how many pre 2016 years are viable, you can only (generally) use a maximum of 30 if contracted out (or maybe 35 with a very small COPE).  They are telling you that you can only use a maximum of three more so purchasing more would take you beyond that limit, more than 3 would not add to your pension. Also the pre 2016 increase per year is only £5.21 so is based on an old rules starting amount, post 2016 years would add £5.82 so a post 2016 year is preferable to a pre at the same price as it gives more bang for your buck. Unfortunately those written forecasts do not give the necessary info for for the 6 points above but it is clear the reasoning behind what they are stating.  It looks like you have access to your on line forecast so the details from that will help make sense of it. The problem is that the on line buying system seems to still be a Beta testing option and some of the choices make little sense and seem to be set at the increase in pension value rather than cost so a post 2016 year will always come before a pre if contracted out, a choose your year and show what it gives would be far better.  You may be better off requesting a call back and put your choices to them.  If you can get those 6 points it will be easy to produce a list for you.

QrizB

2016/17 isn't a pre-2016 year.

Do you need to buy any pre-2016 years at all?

I think there are enough years from 2016/17 to 2030 that you can simply buy those?

Saltrams

QrizB said:

2016/17 isn't a pre-2016 year.

🤦🏼‍♀️ Just goes to show how much this whole thing is confusing me.

Saltrams

molerat said:

There are limits on how many pre 2016 years are viable… If you can get those 6 points it will be easy to produce a list for you.

Thank you for all of that. I think I’ve been spooked by Martin’s big push about getting years in before the looming deadline. It’s clear to me from the letter that I need 11 more years to get the full pension but I’ll probably settle for fewer years voluntary contributions to reach a balance of cost vs return. It seems 2020/21 & 2021/22 are obvious candidates as they are cheaper but 2023/24 and anything after that is more expensive. Looks like either of these could be a good option for now:

As per QrizB’s point, do I really need to grab pre 2016/17 years now at all? Could I take it slowly & buy one year per year, stopping at the point of increase to £907.40?

Thank you both for taking time to help an innumerate numpty, I very much appreciate it.

QrizB

The "combining past and future years" para of your letter seems to say that you need eleven more years in total in order to qualify for a full pension.

2016/17 to 2028/29 inclusive is thirteen years. As you reach pension age before the 6th of April 2030, 2029/30 won't help you.

So I think buying eleven years from 2016/17 onwards should get you a full state pension.

I'd suggest taking Option 3 (or 4 through 8 if your budget stretches that far) now, as they're a bit cheaper than the current full £907.40 price. After 5th April 2025 the years that remain available will all become more expensive.

I think (but am not certain) that after 5th of April you'll only have access to the previous six years, so back as far as 2019/20, and they'll all be more expensive.

I'm writing this on my phone without references so if someone corrects me, believe them.

QrizB

I'm off my phone and on my laptop now. Molerat is much better at this than me but here goes.

• In 2023/24, when you received your letter, the full New State Pension was £203.85. Each year of NI was worth an extra £5.21 (pre-2016) or £5.82 (post-2016).
• Your pension entitlement was £141.69, so you needed an extra £62.16. You could get this from three pre-2016 years (worth £15.63) plus eight post-2016 years (worth a nominal £46.56, but capped at £46.53 by the max NSP).
• Today, in 2024/25, thanks to the Triple Lock the NSP is £221.20 and your current entitlement is £153.75. A post-2016 year is worth £6.32.
• You need an extra £67.45. You can get this by buying eleven post-2016 years; the first ten will add £63.20 and take you to £216.95, the last one will add the remaining £4.25 for a total of £221.20.
• Currently, the cheapest year on offer is 2020/21, then 21/22, then a whole lot of years at £824.20. After the 5th of April this year, years prior to 2019/20 will cease to be available and all the later years will get more expensive.

Just because they're cheap you probably want to buy 20/21 and 21/22 now. If you've got the cash buying some of the £824.20 years will also save you ~10% vs. the cost of buying them later.

Saltrams

I’ve read your reply and will need another 2 or 3 re-reads to understand. I had no idea the figures fluctuate (by which I mean, get more expensive).
Many, many thanks again for the time you have put in - both of you - in helping me.