Paying missed NI contribution - is it worth it?

[ConfusedIsMyMiddleName]

Hello wise ones,

According to the records, I have nearly 20 years of NI contribution records but out of that about 6 years are marked as 'incomplete'. So, it says I can pay them all (about 3k-4k in total) to count those years towards the state pension.
Deadline to do this is by end of this July (finding this amount of money in that time is alltogether a diff question but..), is this something I should be looking in to do? Is that the wise thing?

(out of work years mainly due to stop working to look after DCs but I didn't realise I was still eligible to claim the NI though we were coming under higher bracket on household income due to DH's 'marginal" high income that time, only realised it 2 years after DC2 was born!).

Any advise is greatly appreciated! Thanks.

It depends on your age. You need 35 years of contributions to get a full pension. Do you have enough working years left to get to 35 years?

It depends, are you working now and do you have enough years before retirement where you expect to be working to build up the necessary ( usually 35 ) years needed for a full state pension?

How old are you? If 60 the worth it, If 50 then not worth it

If you claim child benefit, even if you arrange to pay back the value as a higher earner family, your NI contributions will be paid until your youngest child is 12. These years will then count as paid up for your pension entitlement.

There is a free service (Pension-wise I think) where they will go through it with you and figure out mathematically whether or not it is worth paying in. It may not be, depending on your age.

Thank you everyone.
I am in early 40s. Youngest is 8 and am actively looking to return to work.

Yes, I signed up for NI when my DC2 was about 2.5yrs old (tha's when I got to know I could sign up NI).

So you have fourteen complete years meaning you need twenty-one years to get the full SP and you are in your early forties?
If correct that would mean you need to continuously work until SP age to qualify, is that likely?
If you think you are unlikely to work (or want to work) all those years then it would probably be worth paying for the incomplete years (they will be cheaper than a missed year) to be certain.

Just done this for my OH.
They had a gap and have no wish to work into their sixties so we paid for the incomplete years a few weeks ago and their record has just been updated to show as full.

Following on from my previous post.......
When you ring to get your sixteen(?) digit reference number, they will check your eligibility and that you are going to benefit from making the payment.
Of course you should always speak to Pensionwise.

Have you tried this?
https://www.gov.uk/check-state-pension

If someone is going to be claiming means tested benefits in retirement, because they have no other pension ir income, then there’s no point in buying years. If however they have other sources of income, private or occupational pensions, then it probably is worthwhile.

yes, that is correct @Cupcakequeen75 .
I would like to return to work now, however I have to admit that before this, I haven't thought much about working into sixties - now that I had a quick think about it, it doesn't sound like something I might want to do (unless I absoltely have to and capable of) - as I'm also thinking who knows what can happen in few years (healthwise).

@Seymour5 I'm afraid I don't fully unerstand about claiming means tested benefits in retirement. As it stands at the moment,my situation is, I dont have any income for myself (Stay at home parent), no private pension or properties etc. DH is working and (just barey) on high income bracket , don't think he is paying any large contributions to his company provided private pesion pot either- proably only the bare minimum. House with Morgadge for many years to go, etc. So I don't know if will be (should be/able to) claming means tested benefits.

(just barely) I meant.. and Mortgage* : 😬

I haven’t updated my calculations to reflect the increases for this year, but for each additional/missing year I purchased - it gives me an extra £5 per week (£4.00 after tax) - if that also helps.

Yes, that is what we were told.
For the part years that were missing it was a no-brainer for my OH.

@ConfusedIsMyMiddleName you need to contact the future pension team https://www.gov.uk/future-pension-centre

Things to consider:

• Each of the 6 years you have part paid is treated individually so you can choose to top up one year and not another.
• If you can’t afford all six years, top up as many by opting for the ones with the lowest £ top up.
• For each complete year you currently get £5 per week extra pension, that is c£260 per year.
• If you pay 6 years that is currently an extra pension of c£1,560 per year.
• Each year the state pension rises so the current £5 extra per week increases. In 20 years time that extra £5 per week will be worth more.
• You are purchasing at todays prices for a benefit paid at 2040/2050 prices.

You also might not need the full 35 years if you were working before 2016 and didn't contract out of SERPS. I am in this position and only need 31 years to get the full pension, if you get your state pension forecast it will tell you.

I’m pretty sure that it would be worth you paying for some of these incomplete years, providing you can do so without getting into debt etc. So as another PP said, maybe pick two or three of the ones where you have to pay the smallest amount to make it complete? If you did this then you would have maybe 17 day complete years, so if you work from now ( early forties) to around age sixty you would have potentially 35 full years of contributions to state pension by then. So you would have a virtually full state pension, once you reached the age you are eligible to claim it, and if you retired early on private pension or other funds you wouldn’t need to keep working at that stage just to get the state pension.
The only part I am not sure about is whether you get any automatic credit for years when you have young children or not. You used to, but I don’t think you do now without the child benefit thing.

You could pay the oldest 2 years now and then next year pay next oldest 2 years until you pay them off. You have 6 years to catch them up. They can't all be 6 years old.

Normally it is last 6 years, but at the moment - until this July - it's possible to catch up on some older years.

The July deadline is for years from 2006 to 2016.

F

Thank you everyone.

Yes, my incomplete years are unfortunately falling before 2016. :(

I will check the future pension option.
I am going to pay the 2 years which had partial contributions (very small amount to pay) like some of you advised. Thanks.

You will need to speak to the Future Pension Centre in any case, as part of the torturous process of paying the missed NI contributions. They will go through your forecast with you and (when you can get through) will provide solid advice on what years make most sense to pay now. Once that's done, they then transfer you through to HMRC to get hold of the reference number you need for the payment. Warning: this all has to be done by phone. It takes a long time and requires a lot of persistence.

From what you've described, it will be worth it as your pension arrangements don't sound in the best shape. After you have sorted out your state pension, I would have a look at a self-invested personal pension, even putting a few quid a month away will be better than nothing.