HMRC Online State Pension Calculator

jimi_man

I’m still confused over the £970 x 3 years? £960 buys you one year and takes you £239. I wouldn’t bother with the last bit personally.

Even after tax you’ll get that back in four years.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82026948#Comment_82026948

You have misunderstood.

Assuming you are looking at post 2016 years there is no point buying 3 years.

1 years adds £6.89/week. A second adds the final £2.11/week. A third adds nothing.

Silvertabby

The wording on the calculator is likely to be confusing. I had 5 post 2016 gaps, but only needed to pay 4 to take me up to the full amount (3 years at the then rate of just over £5, the 4th at £4.80, so worth doing).

After my payment had been received and my NI records updated, the remaining gap was high-lighted, with details of how much it would cost and how to pay it. I ignored it, as I knew that paying it wouldn't add to my pension - but can see that others may have been confused.

XzavierWalnut

Get the HMRC app, it is very useful.

QrizB

I don’t think I have misunderstood anything.

It certainly looks as though you have.

The weekly state pension currently is £241 a week the estimated amount for me is £232.

OK so far.

I could make the £9 per week up by paying approximately £970 x 3 years to get the maximum.

This is where you're going adrift.

Buying one year will get you an extra £6.89 per week. Buying a second year will get you the remaining ~£2. Buying a third year gets you nothing extra.

A £970 one-off payment for £6.89 pw is almost certainly worth doing. Another £970 for £2 pw is debatable (it's still a better rate than you'd get with an open-market annuity, for example). Paying a third £970 for nothing seems unwise (although the Chancellor will thank you).

retiredbanker1

Thanks

This is the estimate. If I pay one more year of around £970 I would get £239.42 and if I don’t I will get £232.53?

molerat

Yes and there should be another line below that. The year you need to buy is the cheapest shown as available so there should be 24-25 at £907.40.

So paying £1830.40 will give you £8.78 per week or £456.56 per year, a 25% taxable payback on your investment. If you think you are going to live more than 4 years after starting the pension you will be quids in.

molerat

https://forums.moneysavingexpert.com/discussion/comment/82027080#Comment_82027080

The app for most things simply links to the web pages. I find it generally less straightforward than going to the on line account.