Suspend class 3 voluntary NI contributions?

jingleberry · 14 June 2018 at 6:45AM

I'm 61, retired on a final salary pension, and paying class 3 voluntary NI by monthly direct debit until I reach state pension age in 2023. I worked and paid NI for 35 years, but the class 3 payments are to make up for the years I contracted out. According to my pension forecasts by the time I reach state pension age I should be just under the maximum new state pension - I dont have quite enough post 2016 years left to close the gap completely. My only paid employment nowadays is as an exam invigilator at the local school. Normally my earnings from this are very low but this month because it is exam season I think they will be over £503 gross ie above the lower NI threshold. My question is this - should I arrange to suspend my direct debit for the class 3 contributions for this month - will I still be recognised as having a full years contributions by the end of the year? If so what is the best way of going about this. I'm now in the third year of making these DDs and it all works really well at the moment - I'm a little bit worried about messing about with it in case it is difficult to set up properly again. Does anyone else have any experience of suspending their class 3 DD in these circumstances?

Dox · 14 June 2018 at 8:23AM

Don't know how much you would save, but is it really worth the hassle for just one month?

jingleberry · 14 June 2018 at 12:05PM

Its about £65 per month I think, but it would be good if i could do it without too much hassle since it may well happen again eg during future exam seasons

jingleberry · 14 June 2018 at 5:56PM

Think I may have an answer. The gov.uk website has details of the process for claiming a class 3 NI refund. Its a case of writing to HMRC, presumably after the tax year end, and explaining why I want a refund. For anyone else out there in the same situation, have a look at www.gov.uk/claim-national-insurance-refund/y/class-3. Doing it this way means I don't have to disrupt the DD payments already set up. Worth a try anyway.

Iamadored · 17 June 2018 at 3:01AM

jingleberry wrote: »

Its about £65 per month I think, but it would be good if i could do it without too much hassle since it may well happen again eg during future exam seasons

Or, instead of paying by monthly DD, you could pay annually, by cheque, at the start of every new tax year.

You would pay for the previous year, and pay the exact amount necessary to make it a fully paid-up year.

This would be approximately £750, but less if you've already contributed via employment. Your online NI record will tell you exactly how much you need to pay.

It would be a once a year job, so not too much hassle; but a painfully large amount to cough up in one go. A personal choice.

DaveMcG · 17 June 2018 at 2:10PM

Not sure why you aren't paying Class 2 if you have some self employed earnings? Although point a bit moot as they are being abolished next year.

Re the Class 3 it might be worth waiting till closer to retirement and backdating them. You will be able to assess your health at that time.

Suspend class 3 voluntary NI contributions?

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