I've been PAYE all my life, everything deducted at source.
I'm now nearing that point in life where the government want to give me some money every 4 weeks.
I've had the forecast and am a few £ short of full contributions since 2018, when I packed in completely, to the tune of roughly £1650.
They claim that if I pay the missing contributions I will received an enhanced pension of £15.40 a week which is £12.32 after 20% tax.
Dividing £1650 by £12.32 its coming out at 134.6 weeks whereby the enhanced Pension will pay off my extra contributions. I make that 2.6 years.
So if I survive another 2.6 years I'm into profit.
The figures aren't so far out to actually make this a worthwhile gamble - I hope :/
Has anyone taken advantage of filling in the contributions gap, or not, and what was the decision making process?
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Pretty much process you've outlined. As far as I can see there is no more to it than that.
Don't forget your £600 a year net will be index linked. Well worth having I should say.
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>> Don't forget your £600 a year net will be index linked. Well worth having I
>> should say.
>>
A 3.1% increase in the State Pension for Tax Year 2022/3 I believe.
That’s an extra 7 pints a month in The Talbot, Settle.
Cheers.
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You make a very good point LL.
As long as you don't want to beast me round the hills first :)
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About 5 if you pay tax at the standard rate
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You need 35 full years NI record to get a FULL Pension.
Surely most workers will achieve 35 years well before Pension age assuming no breaks due to living/working overseas or taking time off to bring up a family.
Check out your record before parting with money. If you know all your employers against your knowledge - DWP make errors in allocating NI to the right person.
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Thought it was only 30 years now.
Whatever, SWMBO and I both started receiving them last Nov.
Hers was a bit short, we never really did get to the bottom of why, but it hardly seemed worth topping up.
I think mine was a few ££ over the normal figure but again I'm not that bothered why.
I did look at deferring mine to the next tax year (as I'd already used up this year's lower rate tax on drawdown) but again it hardly seemed worth it, even though it goes up by a few bob for each few months that you defer it.
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One day I will need to look into the whole “contracting out” thing!
Back in the 80s/90s when I worked in Norwich Union pensions, dealing with Contracting out of SERPS kept the whole business going.
Must surely be something to do with NI conts and state pension?
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Is 35 years for a full state pension.
Have got 30 years conts at age 50 - already taking my NHS pension, though still working - stay self employed for the next 5 years and that's me.
Then just another 13+ years after that to get it!
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Yep, 35 looks right but did it used to be 30? www.gov.uk/state-pension/eligibility
I also think it was 40 at some point.
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"Check out your record before parting with money. If you know all your employers against your knowledge - DWP make errors in allocating NI to the right person."
Interesting you say that, my record is saying:
You have:
46 years of full contributions
3 years when you did not contribute enough - 18/19, 19/20 and 20/21
Have to phone them tomorrow.
My old employers did 'Opt Out'. Don't know if that makes a difference?
Last edited by: Fullchat on Tue 8 Feb 22 at 19:43
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I did this to make up my state pension. Overall I had enough years but my company had opted out leaving me with some underpaid years. The help lines were very good. My recollection is that you phone one to check your position including how not to pay for too many missed years. You then phone another one to check the precise amount.
The only issue I had were they took my online payment right away but then nothing happened on my record for several weeks. I rang them again and they said that, although I had transferred the total sum as instructed, their system couldn’t break it automatically back into the separate years. This was during Covid so i think, with home working, they just out it in the too difficult pile. A clued-in guy rang me back, apologised and said he could sort it easily.
With this delay I think it took about three months from first approach to my records being right.
You need to check out your own position to make sure it’s right for you. In my case for example my company pension is reduced a little bit (an “offset” they call it) for the enhanced State Pension. It still costed in for me but do your own research.
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What with lockdowns and being less able to spend my brass, I had thought of suspending my state pension for a year. However, it seems that this would only give me an increase of just over 10% a year, which is no more than the terms that were available when I first reached pension age some years earlier.
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I’m more than happy to advise in the spending brass dept...lockdowns are a distant memory and the colonials down under are opening their borders to the double vaccinated later this month.
That could reduce the height of your mattress at one fell swoop. :-)
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>> Check out your record before parting with money. If you know all your employers against
>> your knowledge - DWP make errors in allocating NI to the right person.
Yup, that's a huge issue with Class 3 contributions for people on Universal Credit.
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Just to wrap this up. I made the decision to send HMRC £1650 for an increase of just under £50 / 4 weeks Net. So we will see how this pans out :)
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Thanks everyone for your inputs. :)
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Making Up National Insurance Contributions. - Manatee
