Topping up nic contributions

[fatpatsthong]

DH is a sahp following redundancy when I was pregnant. We stupidly didn't realise until they were about 3 that we should transfer the child benefit to his name even though we dont actually get anything due to my earnings/higher income charge etc.

This coupled with a couple of periods of unemployment means he has a bit of gap in ni contributions of around 5 years.

He has an okish pension from his previous employer but nothing special. At the moment we are very limited to what we can contribute but put aside a small amount into an isa each month.

Mortgage and only outstanding loan will be gone at the end of the year though so the plan is to start loading up both pensions then and we'll be taking some advice at that point to see the best way to do this given he is not a tax payer.

However, the amount we've been putting in the isa for him each month is now more than the ni contribution gap. Is it sensible to put this and top him up to full state entitlement? It's a few thousand so not enormous in the great scheme of things but a (tiny) safety net?

Oh and I know the 'stamp' stops when the kids are 12 so will need to have a longer term plan here in any case

How many years contributions does your DH already have? How many years till he gets his state pension? You can check online what his projected pension will be and that will make the decision easier to make. If he is a long way off qualifying then it maybe worth doing as the return is very good compared to the cost of a years NIC

Agree with pp to sign up to the online portal if you haven't already done so. It spells out how many years NI contributions you have and how many more you need to get your full state pension, and what you'll be entitled to. You can only buy credits going back so many years, but I can't remember what the cut off is.

I just had a look and he can top up 5 years then he's all up to date and still within time limits. It's 'only' 3k which is less than half of his pot so seems to make sense to do this.

I then checked my own and fuck me it was miserable. Only 25 years to go!

5 years NIC is around £23 a week of pension, over a £1000 a year. By the time it is claimed it will have increased even more. Sounds like a good investment!

before he pays in additional contributions, it's worth checking if he will get a lower pension (Contracted Out Pension Equivalent) if he ever contracted out of the additional State Pension. A lot of people who enrolled onto an employers pension plan will be in this position and may find that it's not worth paying in additional contributions.

The contracted out pension equivalent affects the employers pension only. It would have no bearing on the amount of state pension and the ability to boost it through further NIC.

Brahumbug I'm afraid you are wrong. If contracted out, you will receive a lower additional state pension amount (I know, because I will), the expectation is that the shortfall will be made up by the private pension.
DWP have told me there is no point in making additional NIC payments, my COPE is fixed and will go no higher.

It's easy enough to check on their website.

I think I phrased my answer badly. The COPE payment is in your works pension and therefore technically your state pension is the combination of the state pension and the COPE. I have a COPE in my works pension. But it doesn't stop you boosting your state pension by extra NICs

This says COPE can be reduced by paying extra NI contributions:

www.saga.co.uk/magazine/money/retirement/pensions/paul-lewis-how-to-boost-your-state-pension

If you have not already done so you can apply to retrospectively give your DH the NI credits you accumulated up to the point you transferred CB over to him.

www.gov.uk/government/publications/national-insurance-credits-for-parents-and-carers-cf411a gives more information. Not sure what HMRC would consider a 'reasonable explanation' but worth a try before putting money in.

Ensure you add up years worked and NI earned, and outstanding years until SPA. If that’s 35 years, no issue, if not, top up.