Paying 3 Years National Insurance Contributions

Robocop35

Hi,

I have not worked for many years as I lost my job due to Covid, and did two years of Accountancy Qualifications.  Last year I was diagnosed with Bowel Cancer, and had two large operations the end of last year and have been suffering health wise since and I am not getting any help from the NHS.

I phoned up the DWP about making voluntary contributions back in March this year, and I received a phone call from them an hour ago.  I owe them £2,532.40 for 3 years.  I have 28 full years, and 31 years is the maximum I need to get the full State Pension at 68, I am currently 52.

I will currently get £210.97 a week, and this would go up to £230.25 if I pay the monies.

If I don't pay the monies by Christmas, the amount I owe them goes up to £2,769.00 and will continue to go up.

My only and older brother died of Cancer in October at 54.

I have never had any help or benefits from the Government.

I don't know whether I am likely to still be here at that time, its hard to say.  Life is a gamble.

Please can anyone give me their opinion on whether I should just pay it before it goes up again?

Many thanks
James

p00hsticks

You still (under current legislation) have 16 years going forward to fill a 3 years gap. Yes, the price will go up each year, but you can put the money away you;d have spent on them away in a savings account that would compensate for that - and as the years progress you'll hopefully have more of an idea of your life expectancy and if buying those years would make financial sense.   
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Do you have savings that mean you wouldn't qualify for UC ? 
If you are not working and not receiving any benefits, what are you going to live on until you hopefully reach State Pension age ? 

I'm sorry for the bowel cancer diagnosis - I've been there myself in the last eighteen months (two lots of surgery & radiotherapy) so I know that it's not much fun. 

Robocop35

Hi, Thanks for the reply.  I have some savings, so I would not qualify for UC.

I am living on my savings.  I thought I would have had a job by now, but I was not anticipating still having problems health wise.

I also believe my chance of getting work now, unless its a remote job is very low as the country is not in a good state of affairs these days and getting worse unfortunately.

I am sorry you have had health problems as well.

RipleyG

One good reason for paying it is that it sounds like you might be eligible to claim ESA (Employment Support Allowance)? It's a benefit you can claim if you are unable to work due, including due to ill health. It isn't means tested like UC is, but you do need to have paid NI for a particular period - when depend on when you claim, but it's normally the 2 full prior tax years (so currently would be 2023-24 and 2024-25). 

Even if the worst happened and you were unable to claim the additional pension amounts, you may find that the ability to claim ESA now is both a financial benefit, and a peace of mind one.

Another benefit of claiming is that it will give you NI credits that count towards your pension entitlement. So, you may be able to pay just 2 years of voluntary contributions, and claim ESA to get the final year you need for full payment. 

I think the current rate if unable to work is £281 per fortnight.

Good info at this link, and apologies if any of this doesn't make total sense - I'm in the brain fog stage of a health crash, but wanted to reply to this because I only found out about ESA from a kind person who helped me when I was seriously ill. 

https://www.mariecurie.org.uk/information/money-and-work/employment-support-allowance

p00hsticks

RipleyG said:

One good reason for paying it is that it sounds like you might be eligible to claim ESA (Employment Support Allowance)? It's a benefit you can claim if you are unable to work due, including due to ill health. It isn't means tested like UC is, but you do need to have paid NI for a particular period - when depend on when you claim, but it's normally the 2 full prior tax years (so currently would be 2023-24 and 2024-25). 

The OP says that 'I have not worked for many years as I lost my job due to Covid,' so they are very unlikely to be eligible for new style ESA.

I believe that the tax years currently considered for new-stayle ESA and JSA will be 2022-23 and 2023-24, but this will advance soon after the start of the next calendar year to be 2023-24 and 2024-25 (I think the legislation dates back to the times when NI records took quite a long time to be updated). 

 If and when their savings deplete to under £16,000 they would be potentially able to claim Universal credit ,which woudl come with NI credits.

rightfoot_shifter

Sorry to contradict but ESA is means tested in that you have to have less than £16k savings. And it is now being replaced by UC.