Earlyish retirement/National Insurance

[Orillion]

I have been self-employed since 2009. Before that, I was a civil servant for many years. I have more than 35 qualifying years of National Insurance. I have just turned sixty-four, and I have had enough of work. My official retirement age is sixty-six. I receive a civil service pension.

I'd now like to retire. The HMRC website is not impressive, and the telephone helpline cuts off before a real person answers.

1) What do I do?
2) Do I need to keep paying National Insurance until my sixty-sixth birthday?
3) If I do have to continue paying, can I pay a lump-sum to take me up to state pension age?
4) Any other useful points you'd like to raise

[craig1912]

Get a State Pension Forecast and it will tell you if you need more years of NI.

If you do you can leave it to nearer retirement date to pay a lump sum.

[Armitage.Shanks]

As above the state pension forecast on your Govt Gateway account will tell you how much pension you could get and how many years you may still need to contribute which you can pay. As we all know 35 qualifying years doesn't necessarily mean a full state pension!

As a Govt service employee also check your COPE entitlement as it was not unusual for govt employees to pay less NI when in a FS scheme. If you were contracted out and are awarded COPE you may be rather surprised. I was - £78 a week on top.

[Orillion]

Thanks for the replies. I have checked the Government Gateway site and here is the result.



You need to continue to contribute National Insurance to reach your forecast
Estimate based on your National Insurance record up to 5 April 2022

£196.42 a week
Forecast if you contribute another 2 years before 5 April 2025

£203.85 a week
£203.85 is the most you can get
You cannot improve your forecast any further, unless you choose to put off claiming.

If you’re working you may still need to pay National Insurance contributions until ****** 2025 as they fund other state benefits and the NHS.




It would appear that I do need to make further contributions, but it says "if you're working" - well, if I retire, I won't be working. Then it says "you may still need to pay..." - so, do I or don't I? And if I do need to pay, how do I do it?

These questions would probably be easily answered by the helpline staff, unfortunately I never did manage to speak to a real person.

[craig1912]

You need a further two years to get a full pension. You can get a quote nearer your official retirement date and if you want pay a lump sum. No point in paying it now so just wait until nearer the time.

[Armitage.Shanks]

If you retire and you still owe two years to get the max SP then you have a decision to make, either buy the two years at c£900 a year, get a job that will pay NI to cover off the payments or do nothing an accept the £196pw.

It's a balance do you want to pay out c£1,800 to get back an extra £7pw (£336pa) in your SP and in which case how long do you need to live to pass the break even - 6yrs?