NI contributions for early retiree

DRS1

Well you don't have to contribute for EVERY year just the REQUISITE NUMBER of years. What that requisite number is varies from person to person for people like us who straddle the two state pension systems.

Tomabz

In my case, the "requisite number of years" seems to be 50!

I do straddle the two state pension systems and was contracted out for a large portion of that, but it still seems a pretty big number. I used to believe that you needed 35 years of contributions to get the full State pension, though probably with some penalty for contracting out, but the rule changes have obviously significantly changed that.

DRS1

In the good old days of sex discrimination a man would have needed 44 (for a pension from 65) and a woman would have needed 39 (for a pension from 60). For a while there under the old system the magic number was 30. But you also need to remember that the old basic state pension was a pittance.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81903895#Comment_81903895

35 years is a thing, just not for most people yet. It is only relevant to those who start to build up an NI record from 2016.

And you certainly don't need to buy all the years since you retired. That is 100% your personal choice. But from a financial perspective adding another 6 years is a no brainer really.

In round sums it might an initial outlay getting on for £6k. But you would be getting >£2k per year extra State Pension in return (pre tax).

Definitely one of the winners under the transitional rules.

Tomabz

Thanks guys, you've been very helpful.

I guess the biggest risk is that the government (whichever flavour it is) changes the rules (again) and the State Pensions changes again, perhaps even becoming means tested at some point (I do have a DC pension too)

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81903968#Comment_81903968

It already is effectively means tested, as part of the income tax system.

Tomabz

https://forums.moneysavingexpert.com/discussion/comment/81903974#Comment_81903974

Ah, good point, but that probably isn't enough to meet Rachel's "broadest shoulders" criteria 🙂

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81903840#Comment_81903840

Everyone who has worked pre-2016 had a calculation done, and full years NICs after 2016 could potentially top that result up to full new SP.

Posters here have suggested that those under transitional rules need anything from around 28 to 50 years of contributions to get the full amount. However if you are working you have to pay NICs even if you already "have enough" years.

Don't forget that full NSP is still just under personal allowance, so currently income tax isn't payable if that is all you have. Also state pension goes up by the triple lock, which actually means paying for extra years pays for itself more quickly than a straight calculation might suggest.