Shortfall in National Insurance Contributions

ashm1 · 21 October 2006 at 9:40PM

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.

CIS · 21 October 2006 at 10:14PM

It is if you had any break in your NI record during the tax yr in question or if your earnings fluctuate around the lower earnings level.

Quickest way to get the figures is to ring up state penion forecasting on 0845 3000168 and they'll supply them along with a state pension forecast. (you can do it online but theres 2-3week leadin whilst waiting for the ID and PIN)

isasmurf · 22 October 2006 at 11:19AM

There have been a lot of posts about this just lately. It must be the time of the year they send them out.

Before you pay there are 2 things to consider:

1. I understand that there was a delay in processing the forms last year that detail how much NI you paid during 2004-05. So, unless they have caught up it could just be that your details have yet to be entered on to the system.
Guardian: Computer glitch blights national insurance payments. According to a HMRC quote in another article reporting this

"We can immediately put any NI contributions for 2004/05 onto a customer's NI account if they write to us at NICO and enclose a photocopy of the P60," HMRC said in a statement.

2. The Government issued a Pensions white paper earlier this year. This has a number of proposals which may mean that, in terms of the state pension, you do not need to pay extra contriubtions - details here. However, you also need to remember that NI contributions affect other benefits.

ashm1 · 22 October 2006 at 12:06PM

Hi,

It relates to 2003-4 contributions. I graduated in July 2004 and started working immediately. To be honest I have been 'sitting' on this letter because I didn't think it required any action for a while. Thankyou for the link

Now I have a permanent job I'm looking at my civil service pension scheme contribution (currently 2.5%) as I know the conditions have been amended. I need to go through the detail since I may need to transfer out of this scheme at some point or raise my contributions significantly (possibly with a large lump sum). I can't afford to invest in a house at current prices (125K avr) and saving rates aren't fantastic.

Kind regards,

Ashley.

madgamers · 1 November 2006 at 11:31PM

Firstly,

I would just like to say that the quote that isasmurf has provided is complete balls. While some top bod may have indeed said this, this is not the case.

In all cases where we are having processing problems with your emoloyers returns we will simply put them on file for 12 weeks from the date in which we first look at them. You will receive a standard letter to explain the delay.

You will only get them on your account straight away if you complain.

Also, contacting the Pension Forecasting team is not always the best thing to do. Yes you will get an idea of what you can pay, as well as a prediction of your pension entitlement, but the NI office will be able to give you a better picture as by now the rate you where origionally quoted will have increased due to you missing the deadline for payment at the rate first quoted.

If you don't pay this before 5 April 06, it will increase again.

NI Office: 084591 53002

ashm1 · 2 November 2006 at 8:24PM

Hi,

I phoned them today and received the new quote for 03-04 tax yr contribution (quote expires April 05 2007).

I don't have 03-04 P60 to hand but this would have been my 3rd year as an undergraduate so I probably did not work in the summer hence no NI contributions. They gave me the address of the National Insurance Contributions Office to where I would write a letter with attached photocopy of P60 if I suspected they had missed some contributions.

I phoned 0845 915 5996.

Kind regards,

Ashley.

mshambaman · 4 November 2006 at 11:55AM

Hi there

This isn't a reply and advice to this thread but more of another question leading on from it. If I don't get much response, then I will post this as a separate thread (if I can figure out how!)

I have spent large chucks of a number of years abroad without working and so there are big holes in my National Insurance contributions. I have had the letter saying do you want to top up, and on the ones that it isn't a great deal of money, I definately will. Yet there are some years where I didn't make any contrbutions at all. The gist I have got from the stuff I have read here is that people advise that you pay them.

My question is two fold really. Is there any disadvantage of not having consecuative years (ie. with the odd gap here or there)? Or is it better to put that money else where?

Thank you.

EdInvestor · 4 November 2006 at 12:30PM

You can pay up to 6 years in arrears (sometimes a few more) and if you are this number (or more) years short of 30, you should pay them.

It would cost you more than 120,000 quid to buy the state pension as an income on the open market, so as you can see, it's a bargain

steveouk · 8 November 2006 at 2:25PM

Hi

My first time on here but thought it would be the best place to ask a questions.

I have had the letter saying that I have a shortfall in my NI contributions which is fair as it covers a period when I was at uni. However I am not sure if it is worth paying the £50 now or waiting for the reforms to go through then I may not need to pay it. It's just that i know if I pay the money now then the rules will change and I wont get my money back as I think its an underhand way of getting money from people. any suggestions of whether i should pay or wait please?! thank you.

EdInvestor · 8 November 2006 at 2:53PM

Suggest you wait.

jamesd · 8 November 2006 at 4:09PM

The Queen's Speech this year is introducing a batch of reforms. There is ample time to pay it, so wait and see and give people a few weeks to digest what is proposed.

One reform that has been mentioned as possible is counting in weeks rather than years, so getting a full year may not matter as much in the future as it does now.

Shortfall in National Insurance Contributions

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