NI gap query

System

This discussion was created from comments split from: Paying NI Gaps.

Januwee7

I have big gaps in my National Insurance Contribution and have now reached Pension age . 
But when I looked up my forecast it asked me to pay about £ 7700 just to get a Basic State pension of £ 169. 80 a week 
Is it  worth me paying to fill the gaps or keep my money in another private pension ?

QrizB

@Januwee7 your question would be better as a separate thread.

What does your current state pension forecast say?

eskbanker

Januwee7 said:

I have big gaps in my National Insurance Contribution and have now reached Pension age . 
But when I looked up my forecast it asked me to pay about £ 7700 just to get a Basic State pension of £ 169. 80 a week 
Is it  worth me paying to fill the gaps or keep my money in another private pension ?

Your forecast should show how much you'd receive without making the contributions, so you can simply calculate a payback period for what that £7700 buys you, i.e. how many years at the increased payment level before you're ahead - this would normally be about three or four but you'd need to use your own figures.

QrizB

£7700 should buy you at least nine years, more if any of those are already part paid. Nine extra years are worth an extra £56.88 a week, almost £3000 a year of pension before tax. £2400 a year after 20% tax.

So payback for a basic rate taxpayer would be 3 years 3 months.

If you can tell us exactly what your pension forecast says, we might be able to give more specific suggestions.

squirrelpie

When exactly do you reach state pension age? It gets more complicated both to make payments and to get information online as soon as you do   Seems stupid to me, but what do I know.

nomorekids

I'm jumping on this as my national insurance record shows I will get what HMRC is currently the maximum £221.20  a week but when I click on the details tab, some years because I have always juggled several low paid jobs, I have paid less than £50 in the entire year NI, one year only £2. These are showing as "full years" and a couple of years I paid nothing at all but that year is still showing as "full year". Do I trust the forcast? query it? leave well alone and hope I actually do receive the £221.20 ? 

molerat

If you earn above the LEL, currently £123 pw, you will get a credit without having to pay.  These credits do not show up on the record so you can see a full year with no mention of how you got it.

JustOneVolvo

nomorekids said:

I'm jumping on this as my national insurance record shows I will get what HMRC is currently the maximum £221.20  a week but when I click on the details tab, some years because I have always juggled several low paid jobs, I have paid less than £50 in the entire year NI, one year only £2. These are showing as "full years" and a couple of years I paid nothing at all but that year is still showing as "full year". Do I trust the forcast? query it? leave well alone and hope I actually do receive the £221.20 ? 

I would click on "Full Year" to see what it actually says under the headline. I relied on it saying "Full Year" but have now retired and dont get full pension. Ive worked 50yrs with apparent full record. So I went back to check. And some "Full Years" werent actually full. eg It seems about 40yrs ago my employer wasnt paying all my contributions to HMRC. Ongoing stress results having to wait for The Pensions Contributions letter explaining their position. Which can take up to 6wks because 'so many people have been checking and finding things wrong'. I agree with Martin's suggestion you phone now before the April deadline and ask for 'the letter'.

molerat

JustOneVolvo said:

nomorekids said:

I'm jumping on this as my national insurance record shows I will get what HMRC is currently the maximum £221.20  a week but when I click on the details tab, some years because I have always juggled several low paid jobs, I have paid less than £50 in the entire year NI, one year only £2. These are showing as "full years" and a couple of years I paid nothing at all but that year is still showing as "full year". Do I trust the forcast? query it? leave well alone and hope I actually do receive the £221.20 ? 

I would click on "Full Year" to see what it actually says under the headline. I relied on it saying "Full Year" but have now retired and dont get full pension. Ive worked 50yrs with apparent full record. So I went back to check. And some "Full Years" werent actually full. eg It seems about 40yrs ago my employer wasnt paying all my contributions to HMRC. Ongoing stress results having to wait for The Pensions Contributions letter explaining their position. Which can take up to 6wks because 'so many people have been checking and finding things wrong'. I agree with Martin's suggestion you phone now before the April deadline and ask for 'the letter'.

Sorry you are completely off track there and have completely misunderstood how it all works. People have not been finding things wrong, there have been very few reports of the NI record being incorrect, but like you have failed to understand that the widely misquoted and misunderstood 35 years does not apply to them. If your employer had not been passing on your contributions it would not show as a full. A full year is a full year, if there was something wrong it would not show as full.  But it is only a full year as far as the basic pension is concerned.  With that amount of years and not getting the full pension you were contracted out of the second state pension with all that entails with the transition to the new pension.