Voluntary NI contributions
Discussion
Yes you have, you need 35 years full contribution for the new state pension
Start reading here
https://www.gov.uk/new-state-pension
Start reading here
https://www.gov.uk/new-state-pension
catatemyhomework said:
HMRC have written to me offering me the opportunity to make a voluntary contribution of NI for the tax year 2006-2007.
The cost to do this would be £364.55 and must be paid by April 2025.
I currently have 21 full years of NI contribution to the end of April 2024. For some reason, there are 3 years on my record which say "Year is not full", of which 2006-07 is one of them. I was in part-time work as a student from 2001 continuously to September 2007, after which I joined the full-time workforce after University. However, I'm aware there could be several reasons for this.
I plan on retiring (very early) at the end of 2028 or early 2029. Call it another 5 years. This would make my NI record up to 26 years of the full 30, or 27 years if I paid for the additional year.
Based on each year currently being worth £7.37 (£221.20/30) the payback period would be just 49 weeks at today's value come retirement.
The option to buy one of the years, therefore, seems a no-brainer for me. Or have I misunderstood something fundamental?
Yep I would and have done it! you can also do it online now if you have a tax account and it shows up in your NI record much quicker than the old telephone system.The cost to do this would be £364.55 and must be paid by April 2025.
I currently have 21 full years of NI contribution to the end of April 2024. For some reason, there are 3 years on my record which say "Year is not full", of which 2006-07 is one of them. I was in part-time work as a student from 2001 continuously to September 2007, after which I joined the full-time workforce after University. However, I'm aware there could be several reasons for this.
I plan on retiring (very early) at the end of 2028 or early 2029. Call it another 5 years. This would make my NI record up to 26 years of the full 30, or 27 years if I paid for the additional year.
Based on each year currently being worth £7.37 (£221.20/30) the payback period would be just 49 weeks at today's value come retirement.
The option to buy one of the years, therefore, seems a no-brainer for me. Or have I misunderstood something fundamental?
Zolvaro said:
Yep I would and have done it! you can also do it online now if you have a tax account and it shows up in your NI record much quicker than the old telephone system.
When I came this way a couple of years ago the system said either 'Year full' or 'Year not full' and that was the end of the trail. Does it now quantify the deficit for each year AND provide an easy means to pay? (as opposed to waiting on a phone for 100 years)Martin Lewis was on TV the other week on this. Some useful info here:
https://www.moneysavingexpert.com/savings/voluntar...
https://www.moneysavingexpert.com/savings/voluntar...
Simpo Two said:
Zolvaro said:
Yep I would and have done it! you can also do it online now if you have a tax account and it shows up in your NI record much quicker than the old telephone system.
When I came this way a couple of years ago the system said either 'Year full' or 'Year not full' and that was the end of the trail. Does it now quantify the deficit for each year AND provide an easy means to pay? (as opposed to waiting on a phone for 100 years)Edited by Zolvaro on Monday 8th July 10:24
I strongly recommend you get on to the NI people and see if there are other years you can pay up as well. And do it quickly, they are always threatening to increase the cost of paying up missing years and with Rachel Reeves now in charge it would be prudent to make hay while the sun shines.
oddman said:
jimothyc said:
I would have thought your time as a student would have counted as full years contributions. You might do well to see if you can get those corrected as well.
Same applies to me and I've checked. You don't get NI for time at university.catatemyhomework said:
I plan on retiring (very early) at the end of 2028 or early 2029. Call it another 5 years. This would make my NI record up to 26 years of the full 30, or 27 years if I paid for the additional year.
Based on each year currently being worth £7.37 (£221.20/30) the payback period would be just 49 weeks at today's value come retirement.
The option to buy one of the years, therefore, seems a no-brainer for me. Or have I misunderstood something fundamental?
As others have said, you have misunderstood and you *probably* need 35 years to get the full new state pension.Based on each year currently being worth £7.37 (£221.20/30) the payback period would be just 49 weeks at today's value come retirement.
The option to buy one of the years, therefore, seems a no-brainer for me. Or have I misunderstood something fundamental?
It is *probably* because it depends on what you were doing before 2016 when the new rules came in. If you were working before 2016 (which you probably were if you are looking at retiring soon) then everyone's NI contributions, and particularly whether they were 'contract in' or 'contracted out' was assessed and they were put on a transitional starting point.
That starting point meant that some (mainly those who were contracted in) would need less than 35 years to achieve the full new state pension, whereas others (mainly those who were contracted out) would need more than 35 years.
What you need to check is your pension forecast through the government website to see how many years you need to get the full new state pension before doing anything with past years, and then once you have that information decide what to do.
I did a sandwich year at uni in my third year. So because I was working that year, my N.I. was based on my low wages and ended up part year. For the other years, where I was full time study then I got full N.I. I think maybe because you were part time working then it didn't calculate you as full year N.I. for full time student.
As regards your understanding yes it is a very good deal so it is best to take it. I have recently purchased eight years for my OH although it may not pay off since we have more than a decade before state pension age. In your case, presumably when you say you are retiring in five years' time, you mean you will reach state pension age. If that is the case then it is unlikely that any policy changes will affect you.
As regards your understanding yes it is a very good deal so it is best to take it. I have recently purchased eight years for my OH although it may not pay off since we have more than a decade before state pension age. In your case, presumably when you say you are retiring in five years' time, you mean you will reach state pension age. If that is the case then it is unlikely that any policy changes will affect you.
Simpo Two said:
Zolvaro said:
Yep I would and have done it! you can also do it online now if you have a tax account and it shows up in your NI record much quicker than the old telephone system.
When I came this way a couple of years ago the system said either 'Year full' or 'Year not full' and that was the end of the trail. Does it now quantify the deficit for each year AND provide an easy means to pay? (as opposed to waiting on a phone for 100 years)You can now pay online: oh great!
Please enter your 18 digit reference number starting with 60: oh, not so great, I need to get back on the phone to the Future Pension Centre to go through the 100 year phone wait and go through the calculation and get a reference number to pay.
I retired with 28 years NICs.
I plan to buy the extra 7 years at some point, probably here and there though as I am still over 20 years from SPA.
I also had missing years. It took me almost 2 years to get them added. And I was able to do my own earlier year updates.
I would say the chances of getting it added back in that long ago is very slim unless you can produce P60s.
There might be other reasons like you said too like not earning over LEL, employer not declaring etc etc etc.
I plan to buy the extra 7 years at some point, probably here and there though as I am still over 20 years from SPA.
I also had missing years. It took me almost 2 years to get them added. And I was able to do my own earlier year updates.
I would say the chances of getting it added back in that long ago is very slim unless you can produce P60s.
There might be other reasons like you said too like not earning over LEL, employer not declaring etc etc etc.
catatemyhomework said:
Thanks, all. I've logged into HMRC's State Pension Forecast and it confirms I have 21 years of NI to count towards my pension.
I plan to work another five years, so that's 26 years in total that I would have at the point of retirement. I can buy this extra one year, so 27 years total out of the 35 maximum (sorry, not the 30 I mentioned earlier).
But what does the state pension forecast say in relation to how many years you need to contribute to receive the maximum state pension - that is the crucial number, not the theoretical 35 years less what you have accrued.I plan to work another five years, so that's 26 years in total that I would have at the point of retirement. I can buy this extra one year, so 27 years total out of the 35 maximum (sorry, not the 30 I mentioned earlier).
leef44 said:
Simpo Two said:
Zolvaro said:
Yep I would and have done it! you can also do it online now if you have a tax account and it shows up in your NI record much quicker than the old telephone system.
When I came this way a couple of years ago the system said either 'Year full' or 'Year not full' and that was the end of the trail. Does it now quantify the deficit for each year AND provide an easy means to pay? (as opposed to waiting on a phone for 100 years)You can now pay online: oh great!
Please enter your 18 digit reference number starting with 60: oh, not so great, I need to get back on the phone to the Future Pension Centre to go through the 100 year phone wait and go through the calculation and get a reference number to pay.
Edited by Zolvaro on Monday 8th July 18:53
Have they increased how far back can you go? I’m slightly short on one year’s contributions from way back when, but when I looked into it before, it would only let me top up (something like) the last six years. OP seems to be being offered the chance to top up a low contribution from 20 years ago…
My missing year was from the 1990s though, so probably a ship that has long since sailed.
My missing year was from the 1990s though, so probably a ship that has long since sailed.
Gassing Station | Finance | Top of Page | What's New | My Stuff