Quick advice about NI and state pension?

[pensionnamechange]

Hi all,

Have name-changed for this.

I'm pretty hopeless with understanding money/pension matters and I'm hoping somebody can explain this to me. I've been to the Martin Lewis site and watched a video, but I'm still confused about whether it's worth me making some voluntary NI contributions before the opportunity closes shortly.

I've just gone online to check my state pension forecast and NI record. I've never done it before. I'm now aged 62.

I think it looks like good news, but I'm a bit confused. It says this.

• I can get my state pension on 20 Dec 28 (my 67th birthday) and the forecast is £203.85 per week (the current max).

• It says estimate based on my NI record up to 5th April 23 (this year) is £178.23 per week. I'm guessing that means that if I pay no more that is what I'd get at today's figures.

• It says that if I contribute another 5 years before 5 April 28 it'll be £203.85 per week.

Then I went to look at my NI record and that says this.

• I have 32 years of full contributions.

• I have 5 years to contribute before 5th April 28.

• There were 14 years when I didn't contribute enough. (I'm not sure that's correct but let's just leave that out for now.)

Here is my confusion and question.

If I choose to make up up to 5 of those years when I didn't contribute enough would that mean that I would not have to make another 5 years' of contributions before my 67th birthday, to be entitled to the full state pension? If I make up 5, does that mean that if (heaven forbid) I become ill and unable to continue to work at some point before I'm 67 I would still qualify for the max pension? And if, for instance, I choose to make up 2 of the 5 (the cheap ones) does that mean I would only need to pay another three?

I'm pretty sure these are easy questions for those of you who understand this stuff. Any explanation very gratefully received, and thanks in advance for any help.

You can buy back missed years but you have to ring them to see if it will make a difference. For example buying back some years before 2016 for my husband did not change his allocation because he had reached the full old state pension amount or something like that. Don’t just buy back random years ring them and they tell you which ones will count towards the new state pension amount. It’s very complicated, ringing them to advise you is the only way to get it correct and not waste money.

You have 32 years of contributions of the required 35. If you continue working or end up claiming a benefit that gives NI credits for three more years you do not need to make up the missing years - it's wasted money.

Once you have 35 years, you can't just stop paying NI if you're working and earning over the Lower Earnings Limit. It's not voluntary!

It also depends when your incomplete years are from. If they are too long ago you may not be able to make them up.

If you click on each incomplete year on the gateway site it should tell you if you are able to make voluntary contributions to make that year 'paid up' and how much it would cost.

Often it is cheaper to make up more recent years but you may have some where you only missed the contribution limit by a small amount.

Yes, if you 'make up" five missed or incomplete years you should still be eligible for the full pension but as you have five years left to contribute you may pay those years anyway. It depends on your health and whether you are continuing to work.

If you continue to work, even part time you can pay NI voluntarily if your contributions for those years are insufficient to count ... that might be cheaper than paying for previous missed years.

If you pay more NI than years needed it does not improve your pension further.

It's a very personal decision based on your circumstances.

Some people require more than 35, some less. It depends on a few factors like opting out. There have been a few different threads on this but best thing is to try phoning them. My understanding of what you've posted is that you need (for whatever reason) 37 years of contributions to get the full state pension.

Thank you all very much! That's very helpful. I'll ring them on Monday :)

I believe that you only have until the end of July 23 to pay for any missing years of NI contributions from past years. There was an earlier deadline, but it was extended to end of July

I would contact & ask how much you would need to pay to make up the non full years

However if you are 62, you still have until you are 67 to contribute = 5 years

You normally need 35 years of NI contributions to gain a full state pension

However, if some years you only contributed a part year of contributions, then you may need more than 35 years of contributions

https://www.gov.uk/check-state-pension

35 qualifying years for a full SP only applies to those whose did not make NI contributions before 2016: https://www.gov.uk/new-state-pension/how-its-calculated#:~:text=You'll%20need%2035%20qualifying,10%20and%2035%20qualifying%20years.

If you made contributions pre-2016 you may need a different amount of qualifying years.
Paying for more than 30 pre-2016 years does not result in an uplift of your final SP amount.

If I were you, I’d plan to work for another two or three years, and I’d buy back the cheap 2 years, so you have them in the bag, so to speak.
This would mean you could have a couple of years where you could choose to retire early.

35 years is only applicable to young people who started paying after 2016. Those of us older than this, who started paying NI before thus can need a variable number of years, that appears to based on the whim of the Gov.Gateway

Good luck with your phone call tomorrow

Thanks for this! That’s what I’m hoping to do. I’m glad to hear that it makes sense to somebody else as well 👍 Thanks for the good luck for the phone call x

• Tbh it doesn't really matter if you've paid enough NI contributions or not to get a full state pension. If you haven't, then you can claim Pension Credit which will bring you up to more- or- less full SP rate plus you can get other help:
• Housing Benefit if you rent the property you live in
• Cost of Living Payments
• Support for Mortgage Interest if you own the property you live in
• a Council Tax discount
• a free TV licence if you’re aged 75 or over
• help with NHS dental treatment, glasses and transport costs for hospital appointments, if you get a certain type of Pension Credit
• help with your heating costs through the Warm Home Discount Scheme
• a discount on the Royal Mail redirection service if you’re moving house

I have a full NI record and can't claim any extra help

You can choose to retire early, but you still won't get your state pension any earlier. If you pay all your qualifying years NI before your state pension age, you still continue to pay full NI, if you are earning, until your state pension age.

@ilovemyspace

But pension credit takes into account other income, if Op has any other pensions (eg a company one) or income, she won’t be eligible for pension credit but might still want a full state pension!