Martin says one thing about buying NI years, the Government seems to say another

james-harris

As I understand it, Martin's advice is that buying one missed NI year for around £800 ought to increase our state pensions by approximately £300 per year.

However:

The Government seems to be telling me that even if I were to buy SIX years (to make my total 35 years) I'd get only about £150 more per year - which would mean in my case that buying years would cost me money rather than gain it.

Perhaps I'm misinterpreting what the Government is saying. The heading in question is:

   "Estimate based on your National Insurance record up to 5 April 2024."

The amount. £218.20 a week. That's only £3 week (or c. £150 a year) short of target.

It SOUNDS as though I've already paid in enough to get £218.20 a week even if I buy or work for no more NI years. Is that right? Or am I misunderstanding what the Government is telling me?

For what it's worth, I'm 60, retired, and with just 29 full NI years.

Has anyone else managed to work this kind of thing out?

James

QrizB

james-harris said:

The Government seems to be telling me that even if I were to buy SIX years (to make my total 35 years)

Where has anyone - Martin , Government or otherwise - said that *you* need to buy 6 years and get to a total of 35?

james-harris said:

The heading in question is:
   "Estimate based on your National Insurance record up to 5 April 2024."
The amount. £218.20 a week. That's only £3 week (or c. £150 a year) short of target.
It SOUNDS as though I've already paid in enough to get £218.20 a week even if I buy or work for no more NI years. Is that right?

Yes. What makes you think it's wrong?

james-harris said:

For what it's worth, I'm 60, retired

You've got 6 or 7 years, then, in which to buy one more year and max out your state pension at £221.20 a week.

Dazed_and_C0nfused

james-harris said:

As I understand it, Martin's advice is that buying one missed NI year for around £800 ought to increase our state pensions by approximately £300 per year.

However:

The Government seems to be telling me that even if I were to buy SIX years (to make my total 35 years) I'd get only about £150 more per year - which would mean in my case that buying years would cost me money rather than gain it.

Perhaps I'm misinterpreting what the Government is saying. The heading in question is:

   "Estimate based on your National Insurance record up to 5 April 2024."

The amount. £218.20 a week. That's only £3 week (or c. £150 a year) short of target.

It SOUNDS as though I've already paid in enough to get £218.20 a week even if I buy or work for no more NI years. Is that right? Or am I misunderstanding what the Government is telling me?

For what it's worth, I'm 60, retired, and with just 29 full NI years.

Has anyone else managed to work this kind of thing out?

James

What have you read that suggests you need 35 years 🤔

Or that you should buy 6 years.  Which is completely different to having 6 years available to buy.

If you are only £3.00 short of your personal maximum of £221.20 why would you consider buying more than one year?

£3.00/week return (probably £3.12/week from April) for an outlay of £800 in a hard return to beat really.

james-harris

QrizB said:

james-harris said:

The Government seems to be telling me that even if I were to buy SIX years (to make my total 35 years)

Where has anyone - Martin , Government or otherwise - said that *you* need to buy 6 years and get to a total of 35?

I didn't say anyone did. I said the Government's projected rewards for me getting to 35 full years seemed to be much lower than Martin had suggested - the the point that unless I an going to live to age 99 I would LOSE money by buying the extra NI years rather than gain by doing so.

I suspect many others would also lose money by buying missing NI years.

james-harris said:

The heading in question is:
   "Estimate based on your National Insurance record up to 5 April 2024."
The amount. £218.20 a week. That's only £3 week (or c. £150 a year) short of target.
It SOUNDS as though I've already paid in enough to get £218.20 a week even if I buy or work for no more NI years. Is that right?

Yes. What makes you think it's wrong?

Here are two examples. Note that both imply that it's worth buying missing years - which I think you've confirmed would be untrue in cases like mine.

(1) Martin says: "Each missing NI year you get adds an inflation-proof £329 to what you receive in State Pension every year."

I gather that that's simply untrue in cases like mine. Yet it's in the latest email which at the time of writing is visible at https://www.moneysavingexpert.com/latesttip/ .

(2) Step 5 at https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/ says

"The maths is simple. If a full NI year usually costs you £824 and adds up to £328 each year to your pre-tax State Pension, it's worth it as long as you live at least three years after getting your pension ....".

The MSE calculator that follows makes the same projection.

James

molerat

All that is true for a full year gap,  you do not have a full year gap so the return is not as great.  

james-harris

Dazed_and_C0nfused said:

What have you read that suggests you need 35 years 🤔

Or that you should buy 6 years.  Which is completely different to having 6 years available to buy.

Good question. Martin's website says "To get the full new State Pension (currently £221.20 a week), you'll likely need at least 35 qualifying NI years (though some will need many more). ".

That's from https://www.moneysavingexpert.com/savings/state-pensions/.

If you are only £3.00 short of your personal maximum of £221.20 why would you consider buying more than one year?

£3.00/week return (probably £3.12/week from April) for an outlay of £800 in a hard return to beat really.

Are you saying that me having 30 full years rather than 35 /might/ deliver a full state pension? If so, that would be great! But it seems to fly in the face of the comment from Martin's website, above, so do you know of anything online which I could use to confirm it?

As it happens although I class myself as retired at the moment I may go back to work for a while before I reach official retirement age in 6 years time. That would give me at least an extra year's NI contributions and, again, presumably mean it would be a bad idea for me to buy a prior year's NI just now.

James

p00hsticks

james-harris said:

Dazed_and_C0nfused said:

What have you read that suggests you need 35 years 🤔

Or that you should buy 6 years.  Which is completely different to having 6 years available to buy.

Good question. Martin's website says "To get the full new State Pension (currently £221.20 a week), you'll likely need at least 35 qualifying NI years (though some will need many more). ".

That's from https://www.moneysavingexpert.com/savings/state-pensions/.

If you are only £3.00 short of your personal maximum of £221.20 why would you consider buying more than one year?

£3.00/week return (probably £3.12/week from April) for an outlay of £800 in a hard return to beat really.

Are you saying that me having 30 full years rather than 35 /might/ deliver a full state pension? If so, that would be great! But it seems to fly in the face of the comment from Martin's website, above, so do you know of anything online which I could use to confirm it?

Yes it's perfectly possible to qualify for a full state Pension with as few as 29 years - hence Martin's inclusion of the word 'likely' in his website. This is probably due to you being contracted in to SERPS /S2P prior to 2016 and so paying a higher rate of NI than those who weren't 

pinnks

I have seen 2 cases now where only 28 years were needed to achieve the maximum new state pension.  Still on the lookout for one needing fewer but perhaps 28 is the minimum possible?