Retiring early - question re NI top ups for full state pension.

trance

I am due to retire in March 2030, but plan to retire next year - April 2026.
If I was to continue to work until my official retirement age, I would have paid enough in NI contributions to receive a full pension.
As I am retiring early, I will be 4 years short.

My question is - can I, before I reach state pension age, pay to top up my pension every year so that I get the full amount?

Or - I have 4-5 years that are not full, and I can pay £824 for each of them, which would then leave me due the full state pension already when I retire next year.  Is it a better option to back pay now, or shall I just pay every year until my state pension age?

I don't want to put it off and then realise that it's too late to top my pension up.

molerat

Up to you which way you do it provided those gaps will add to your pension, not all do.  Personally I would put the money away now in a high interest account and pay at the other end if necessary unless those past years are very cheap part filled.   Are you sure you need those years, very unusual unless you have a lot of past gaps.  Post up some anonymous info from your forecast and someone will sense check it.

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

trance

molerat said:

Up to you which way you do it provided those gaps will add to your pension, not all do.  Personally I would put the money away now in a high interest account and pay at the other end if necessary unless those past years are very cheap part filled.

Thank you - I wasn't sure whether there was a deadline that stopped you making voluntary contributions.  None of the years are part filled so I have to pay for full years.

comeandgo

I retired early 5 years ago with a few years short to get full pension and had similar thoughts to you but did not buy back any years in case my husband needed a carer.  I’m now in part time work, been for over a year so will have only one year to buy back.   I’d not buy back yet, wait until it is the only option left.

trance

molerat said:

Up to you which way you do it provided those gaps will add to your pension, not all do.  Personally I would put the money away now in a high interest account and pay at the other end if necessary unless those past years are very cheap part filled.   Are you sure you need those years, very unusual unless you have a lot of past gaps.  Post up some anonymous info from your forecast and someone will sense check it.

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

I was a student on and off, and also self-employed, but not earning much due to other responsibilities.

This is what my main page said

It hasn't updated yet for this year 2024-2025, and I will work another year before retiring, so it looks like I only have 2 years to top up, which is better than I first thought, if I'm reading it right.

Dazed_and_C0nfused

trance said:

molerat said:

Up to you which way you do it provided those gaps will add to your pension, not all do.  Personally I would put the money away now in a high interest account and pay at the other end if necessary unless those past years are very cheap part filled.   Are you sure you need those years, very unusual unless you have a lot of past gaps.  Post up some anonymous info from your forecast and someone will sense check it.

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

I was a student on and off, and also self-employed, but not earning much due to other responsibilities.

This is what my main page said

It hasn't updated yet for this year 2024-2025, and I will work another year before retiring, so it looks like I only have 2 years to top up, which is better than I first thought, if I'm reading it right.

Just be aware that post 2016 years will add £6.32/week but your personal maximum is £221.20 so another 3 takes you from £201.02 to £219.88.

A fourth year just adds the final £1.22/week.  Not quite as good value.

molerat

08-09 and 09-10 may not add to your pension, all the information asked above is needed to confirm that.

trance

Thanks for your advice everyone, very helpful!

I have asked for a call back from a Future Pension advisor. Will they tell me that some years are worth more, and which ones to pay off, or will they let me pay off any year, even if they don't add/add much to my pension?

I am thinking that the best years to pay off will be those to come, if I retire early at 63, I have 4 years where there will be no NI paid.  One of those will be taken up by the year just gone.

Dazed_and_C0nfused

trance said:

Thanks for your advice everyone, very helpful!

I have asked for a call back from a Future Pension advisor. Will they tell me that some years are worth more, and which ones to pay off, or will they let me pay off any year, even if they don't add/add much to my pension?

I am thinking that the best years to pay off will be those to come, if I retire early at 63, I have 4 years where there will be no NI paid.  One of those will be taken up by the year just gone.

You can buy as many years as you have available of you wish.

But buying more than the years you need to reach £221.20 (or possibly £219.88 in your case) would be a very unusual choice!

You said this yesterday, what has changed since then?

It hasn't updated yet for this year 2024-2025, and I will work another year before retiring, so it looks like I only have 2 years to top up, 

trance

Dazed_and_C0nfused said:

trance said:

Thanks for your advice everyone, very helpful!

I have asked for a call back from a Future Pension advisor. Will they tell me that some years are worth more, and which ones to pay off, or will they let me pay off any year, even if they don't add/add much to my pension?

I am thinking that the best years to pay off will be those to come, if I retire early at 63, I have 4 years where there will be no NI paid.  One of those will be taken up by the year just gone.

You can buy as many years as you have available of you wish.

But buying more than the years you need to reach £221.20 (or possibly £219.88 in your case) would be a very unusual choice!

You said this yesterday, what has changed since then?

It hasn't updated yet for this year 2024-2025, and I will work another year before retiring, so it looks like I only have 2 years to top up, 

Nothing has changed, just me getting confused!  So I will really only need to pay 1 year extra on top of my working years, which will take me up to £219.88.  To make the final £824 payment worth it, I have to live 13 years (to 80) after my retirement date to break even - I think it may be better to stick the £824 in a savings account instead, in that case!

Dazed_and_C0nfused

trance said:

Dazed_and_C0nfused said:

trance said:

Thanks for your advice everyone, very helpful!

I have asked for a call back from a Future Pension advisor. Will they tell me that some years are worth more, and which ones to pay off, or will they let me pay off any year, even if they don't add/add much to my pension?

I am thinking that the best years to pay off will be those to come, if I retire early at 63, I have 4 years where there will be no NI paid.  One of those will be taken up by the year just gone.

You can buy as many years as you have available of you wish.

But buying more than the years you need to reach £221.20 (or possibly £219.88 in your case) would be a very unusual choice!

You said this yesterday, what has changed since then?

It hasn't updated yet for this year 2024-2025, and I will work another year before retiring, so it looks like I only have 2 years to top up, 

Nothing has changed, just me getting confused!  So I will really only need to pay 1 year extra on top of my working years, which will take me up to £219.88.  To make the final £824 payment worth it, I have to live 13 years (to 80) after my retirement date to break even - I think it may be better to stick the £824 in a savings account instead, in that case!

From April 2025 the current £1.32/week shortfall will be more likely £1.37/week.  Or £71/year.

Which savings account will return 8.6%.  With triple lock like protection in future years 😉