Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • ashm1
    • By ashm1 21st Oct 06, 9:40 PM
    • 233Posts
    • 43Thanks
    ashm1
    Shortfall in National Insurance Contributions
    • #1
    • 21st Oct 06, 9:40 PM
    Shortfall in National Insurance Contributions 21st Oct 06 at 9:40 PM
    Hi,

    I have misplaced the letter (only have the guidance to hand). It's along the lines of I can pay x's by 5 April 2010 due to shortfall in NI contributions to state pension. I need to read all the guidance but is this shortfall common?


    Kind regards,

    Ashley.
Page 2
    • Beate
    • By Beate 21st Jan 07, 3:17 PM
    • 3,522 Posts
    • 4,201 Thanks
    Beate
    There is an article in today's financial section of the Sunday Express titled "Pension top-ups refund storm" which basically says that any top-ups paid since 25 May of last year, which is when the new legislation about 30 year's worth of contributions instead of 44/39 years was announced, would be entitled to a refund. The Pensions Bill becomes law later this year and they do not know yet how to refund payments.
    My friend has paid the powers that be 710.55 last September which consists of a shortfall for the tax years 2000/2001 up to the tax year 2003/2004. Unfortunately, he will turn 65 on 4 April 2009, so, as the new rules will apply to anyone retiring in April 2010 or later, does that mean he will not get this money refunded because he is just one single year too old?
  • EdInvestor
    Correct. He won't.

    Anybody who retires before 2010 and is short of the min 44/39 years presently required still has to pay in up to their retirement date even if they have more than 30 years.
    • Beate
    • By Beate 21st Jan 07, 4:11 PM
    • 3,522 Posts
    • 4,201 Thanks
    Beate
    Bummer.
    • strawberrylane
    • By strawberrylane 30th Jan 07, 11:18 PM
    • 252 Posts
    • 106 Thanks
    strawberrylane
    Please can someone clarify for me, under the planned new pension rules do we know for sure yet whether there will still be a concept of automatic credits for the 5 years prior to retirement age? Under the new rules my state retirement age will be 66. If I get to 61 and have 25 qualifying years at that point, will I then get 5 additional years automatically credited between age 62 and 66?
    • seven-day-weekend
    • By seven-day-weekend 31st Jan 07, 12:43 AM
    • 33,865 Posts
    • 68,233 Thanks
    seven-day-weekend
    There is an article in today's financial section of the Sunday Express titled "Pension top-ups refund storm" which basically says that any top-ups paid since 25 May of last year, which is when the new legislation about 30 year's worth of contributions instead of 44/39 years was announced, would be entitled to a refund. The Pensions Bill becomes law later this year and they do not know yet how to refund payments.
    My friend has paid the powers that be £710.55 last September which consists of a shortfall for the tax years 2000/2001 up to the tax year 2003/2004. Unfortunately, he will turn 65 on 4 April 2009, so, as the new rules will apply to anyone retiring in April 2010 or later, does that mean he will not get this money refunded because he is just one single year too old?
    by Beate
    Yes, I reach retirement age in Janary 2010 and am still under the 39/44 year rule . I have one more year to pay.
    Last edited by seven-day-weekend; 31-01-2007 at 12:45 AM.
    Member #10 of 2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
  • castellburt
    Hi,

    I have misplaced the letter (only have the guidance to hand). It's along the lines of I can pay x's by 5 April 2010 due to shortfall in NI contributions to state pension. I need to read all the guidance but is this shortfall common?


    Kind regards,

    Ashley.
    Originally posted by ashm1
    I had a similar letter a couple of years ago which told me that because of the shortfall in payments I would have to pay literally thousands of pounds. I was very very upset and frightened- I thought that I was covered by my husbands NI. but it was not so......I am still confused about this- but as my income is so low all payment was cancelled until this year- which reminds me I should phone them to find out what is going to happen now. Caroline
    • seven-day-weekend
    • By seven-day-weekend 20th Mar 07, 2:40 AM
    • 33,865 Posts
    • 68,233 Thanks
    seven-day-weekend
    Caroline, you don't HAVE to pay anything if you are not earning enough. In this case you will be entitled to a 60% Pension based on your husbands' contributions if you are over 60 and he is 65, and if you are still married.

    I don't know your situation, but it may be worthwhile paying voluntary contributions if you can. Ask about it when you ring.

    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/PensionsAndRetirement/FinancialPlanningForRetirement/DG_10021384

    http://www.pensionsadvisoryservice.org.uk/state_pensions/entitlement/
    Member #10 of 2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
    • ashm1
    • By ashm1 26th Mar 07, 7:12 PM
    • 233 Posts
    • 43 Thanks
    ashm1
    I received a letter today from the Inland Revenue informing me that my record has been updated and there is no shortfall in the tax year 04/05.



    Just need to decide whether to buy the 03/04 year now or closer to 2010....
    Last edited by ashm1; 26-03-2007 at 7:14 PM.
  • waycombe
    Not so much a reply as another question, so at 59 I have a large shortfall in contributions (due to numerous things through my life), can I pay a lump sum to bring my contributions up to the 30 years or whatever is required or do I just resighn myself to starving to death when I get a bit older?[/I]
  • EdInvestor
    At the moment you can pay up to around 10 back years.Will that bring you up to 30 years?

    If you are a man, you have another 6 years to go to 65 also, of course.

    If you are a woman the 30 year rule won't apply to you and situation might be quite gloomy, but have you claimed any Home responsibilities credits for looking after children, if due?

    Check here:

    www.thepensionservice.gov.uk
    • jamesd
    • By jamesd 3rd Apr 07, 11:15 PM
    • 23,494 Posts
    • 15,831 Thanks
    jamesd
    Get the state pension forecast. It'll tell you what years you can buy. Each year up to the limit will increase the pension you get so buying all available years is probably a good idea.

    Beyond that, once you have those details start a new discussion with more of your circumstances including details of any work or personal pensions and your projeced income from the two state pensions and people will say what they suggest looks best for you.
    • mystic_trev
    • By mystic_trev 12th May 07, 4:17 PM
    • 5,147 Posts
    • 15,365 Thanks
    mystic_trev
    I'm after some help!

    I retired in 1996 aged 42 yeah, I know how lucky can you get!

    I've not been paying any Class 3 contributions since then, and have just received my forecast.

    "The latest information we have on your NI contribution record shows that, up to 5th April 2006 you have 27 qualifying years on which you get a basic State Pension of 62% of the full rate"

    I'm wondering what I ought to do? Pay three years taking me up to 30 or pay for the whole 9 years backlog? My thoughts are to just pay the last three years, does this seem the sensible thing to do?
  • EdInvestor
    Just pay three, since you will retire later than 2010, that should give you the full basic.
    • jamesd
    • By jamesd 12th May 07, 5:49 PM
    • 23,494 Posts
    • 15,831 Thanks
    jamesd
    If you are a man aged 60 to 65 and you are not paying contributions on earnings (because, for example, you have taken early retirement), you will get NI credits.

    It appears that those credits will get you over 30 years but I'm not sure of the rules so you should check to ensure that they will.

    Personally, if ample money is available, I'd go with the pay three years and be certain of it option. Of those years I'd pay the oldest, not the most recent, assuming that if there is any extension of time to pay and you have a reason to change your mind, the more recent years are more likely to still be payable than the older ones.
    • Phil3822
    • By Phil3822 1st Jun 07, 9:52 PM
    • 568 Posts
    • 250 Thanks
    Phil3822
    I got one of these letters last year saying I owe around 50 NI contributions. Im only 22 so am wondering if its worth paying or not. This all makes very little sense to me! Looking for an easy answer...
    • jamesd
    • By jamesd 2nd Jun 07, 12:25 AM
    • 23,494 Posts
    • 15,831 Thanks
    jamesd
    That sounds worthwhile to give you more flexibility for working abroad later in life, perhaps. It's pretty unlikely that you'll actually need it to get the full basic state pension unless you do something like workiing abroad.
  • squirrl
    It seems to me that the Government is about to create a date of birth lottery. A male born in 1944, with 30-43 years of NI contributions, will not receive a full state pension. On the other hand, a male born in 1945 or later, with 30 years of contributions, will receive a full state pension.
  • EdInvestor
    That's right.There have been some complaints about this "cliff edge" but the Government is unmoved, as it wants to get the problem sorted now in one hit.It mostly affects women, and the quid pro quo is that most of those who still need the full number of years at least get their pension paid from 60 so will benefit that way.

    Any man caught in this should check to see if he has any missing years he can catch up on. There won't be many - 87% of men are eligible for the full basic state pension now, with women it's more like 35%, the new rules will increase that to 70%.
    • jamesd
    • By jamesd 6th Aug 07, 8:50 PM
    • 23,494 Posts
    • 15,831 Thanks
    jamesd
    squirrl, yes, it's a lottery of sorts. On the other hand, those who are not in the group that benefits from this reduction are in the group that wasn't paying enough to cover the longer life expectancies that they have, so they have gained in that way instead.

    Prior to the change it was impossible for me to qualify for the full basic state pension even by paying voluntary class 3 contributions for all years from 1996 to 2001.
    Last edited by jamesd; 06-08-2007 at 8:52 PM.
  • dweep
    I have a question about continuing NIC's until I retire on my 60th birthday in 2009. ( I am female)
    I have left my job and intend to spend my time up to my retirement date working for a total of about 5 months of each tax year earning just enough to pay the bills.
    I anticipate earning a minimum of 4700 each tax year and probably a maximum of 6000.
    I want to continue paying NIC's towards my pension.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,136Posts Today

7,787Users online

Martin's Twitter