Conflicting information from Future Pensions and HMRC

Riva114

I hadn't ever thought that topping up my many missing years was remotely affordable, because a year costs over 800 quid (more than I'd actually ever made in a year...) until I read on here that there was a much lower self employed version (£100-170, depending on the year that was missing). 
So I FINALLY got my callback from the Future Pensions Service a few weeks ago, and the chap said absolutely I could pay the smaller amount of NI that self employed people pay, even though I'd never registered as self employed, having never made enough catsitting and selling dog photos to actually need to do a self-assessment. Did I have to be registered in advance was the VERY first question I asked him! He said definitely not. 
He even gave me a pension forecast!
Rang up today to pay it. National Insurance lady said oh no, to pay class 2, you needed to have been registered as self employed 20 years ago, when nobody knew this was a thing. If you want to buy back years now, that'll be 10 grand of class 3 please. 
Pretty sure I'm not going to live long enough to make THAT worthwhile, even if I actually had it to give to them!
She said I can't even top up the last 6 years, only the ones in future if I register as self employed now. The government website keeps telling me there's no need to register, as I earn so little - I presume I can just ignore that and register anyway? 
But the main question is, how could the Future Pensions guy be THAT wrong - it's his one job! 
And IS he wrong? The internet has been completely unhelpful.

FrugaiMacDugal

Riva114 said:

So I FINALLY got my callback from the Future Pensions Service a few weeks ago, 

Have you a link to the Future Pensions Service.

The Future Pensions Centre is the Gov.UK site, here.

Were you using third party service?

Dazed_and_C0nfused

Riva114 said:

I hadn't ever thought that topping up my many missing years was remotely affordable, because a year costs over 800 quid (more than I'd actually ever made in a year...) until I read on here that there was a much lower self employed version (£100-170, depending on the year that was missing). 
So I FINALLY got my callback from the Future Pensions Service a few weeks ago, and the chap said absolutely I could pay the smaller amount of NI that self employed people pay, even though I'd never registered as self employed, having never made enough catsitting and selling dog photos to actually need to do a self-assessment. Did I have to be registered in advance was the VERY first question I asked him! He said definitely not. 
He even gave me a pension forecast!
Rang up today to pay it. National Insurance lady said oh no, to pay class 2, you needed to have been registered as self employed 20 years ago, when nobody knew this was a thing. If you want to buy back years now, that'll be 10 grand of class 3 please. 
Pretty sure I'm not going to live long enough to make THAT worthwhile, even if I actually had it to give to them!
She said I can't even top up the last 6 years, only the ones in future if I register as self employed now. The government website keeps telling me there's no need to register, as I earn so little - I presume I can just ignore that and register anyway? 
But the main question is, how could the Future Pensions guy be THAT wrong - it's his one job! 
And IS he wrong? The internet has been completely unhelpful.

I suspect you are asking them questions they aren't actually qualified to answer.

Have you read this?
https://www.rossmartin.co.uk/starting-in-business/5704-starting-in-business-registering-for-tax

And this
https://www.gov.uk/pay-class-2-national-insurance

Riva114

No, not using third party service. 
I have the number for the Future Pensions, thanks, but haven't managed to get past the queue yet! Gave up after 25 minutes because it was nearly closing time... 

itsthelittlethings

Would you be better off on Pension Credit?

pinnks

Are you UK resident or do you live abroad?  If you live in the UK you need to be self-employed to pay Class 2 but if you live abroad and meet the conditions, you may be able to pay at Class 2 rather than Class 3.  As with many things in life, the devil is in the detail but one thing is fore sure and that is that only HMRC can give you a definitive answer on the Class of NI you need to pay.

molerat

DWP / Future Pension Centre can tell you how many and which years you need to fill to increase your pension.  Only HMRC can tell you what rate is applicable to those years.  There are many hoops to jump through to be entitled to pay the lower self employed class 2 rate.

As to being worth it - class 3 pays back the capital outlay in around 3 years so you would be in profit at around 70.  It is like buying a 40% single lifetime increasing annuity - where else could you get that ?

But, as has been mentioned, if your circumstances mean that without topping up you would be eligible for pension credit then it is likely not worth doing.

Riva114

itsthelittlethings said:

Would you be better off on Pension Credit?

I don't know - I thought you only got Pension Credit if you actually got a state pension? 

Riva114

pinnks said:

Are you UK resident or do you live abroad?  If you live in the UK you need to be self-employed to pay Class 2 but if you live abroad and meet the conditions, you may be able to pay at Class 2 rather than Class 3.  As with many things in life, the devil is in the detail but one thing is fore sure and that is that only HMRC can give you a definitive answer on the Class of NI you need to pay.

UK. Clearly I would have been better off moving abroad and paying it. 😭

Dazed_and_C0nfused

Riva114 said:

itsthelittlethings said:

Would you be better off on Pension Credit?

I don't know - I thought you only got Pension Credit if you actually got a state pension? 

https://www.gov.uk/pension-credit/eligibility

Riva114

molerat said:

DWP / Future Pension Centre can tell you how many and which years you need to fill to increase your pension.  Only HMRC can tell you what rate is applicable to those years.  There are many hoops to jump through to be entitled to pay the lower self employed class 2 rate.

As to being worth it - class 3 pays back the capital outlay in around 3 years so you would be in profit at around 70.  It is like buying a 40% single lifetime increasing annuity - where else could you get that ?

But, as has been mentioned, if your circumstances mean that without topping up you would be eligible for pension credit then it is likely not worth doing.

It is starting to sound like DWP just made a huge (and really disappointing) mistake telling me I could pay at the lower rate.  😔
I'm sure it is worth it if you're in robust health and have a spare 10 grand lying around, but neither of those apply to me, unfortunately.