Should I pay my missing NI to give me a full year?

[elevenpiperspiping]

Still have 20 years to go until retirement age but just thought I’d look at my state pension forecast. I have 4 years that were not paid in full. The first three are whilst I was at university and it’s too late to backpay those anyway and then I have one incomplete year (2020 🙄) annoyingly I was only just under the threshold. I can pay £300 to change it to paid in full. But I can’t decide if it’s really worth doing?

Yes.

Definitely yes

How many years do you have already?

I think it depends if you will still have enough qualifying years to get the full pension. I’m 38 so state pension is awhile off for me but I checked last year and I have one year not paid in full. I worked out that if I carry on working as planned I will still have well over 35 qualifying years of NI contributions by the time I retire, so I decided not to make up the difference.

How many years do you have already? How many more do you need? If you can easily reach the target with some spare then it's probably not worth it. £300 is a lot of weeks short. Were you eligible for credits for any reason e.g. for a child under 12?

Yes

I have 28 full years (plus 3 years not full from university and 1 year not full from 2020-2021) and I reach state pension age in 2044

Yes

You only need to work another 7 years out of the 20 you have left until you retire to have eligibility.

It's up to you to weigh up if paying it now reduces the risk later. No one can predict the future.

FWIW I'm in an almost identical position and decided that I'll bank on being able to work at least another 7-8 years and to keep the money for now.

Any reason you’re unlikely to only work 7 years in the next 20?

@Clartzillathat was my thinking, it’s just that you only have 6 years to backpay so would need to do it soonish that is swaying me. I can’t see any reason why I won’t work for another 7 years, it’s just thinking is it worth just banking it to get another one under my belt!

I’d do it, you never know what might happen in the future so I’d protect my pension entitlement

I personally wouldn't. It sounds likely you'll make up the contributions over the rest of your working life.

I looked into this, it's not really worth it if you only have a few years to make up, and lots more years to work!

For the sake of £300 id pay it, you don't know what's round the corner

I'd pay it. The goalposts are quite likely to be moved before you retire (only 35 years for full state pension isn't sustainable imo). I'd rather have guaranteed year if I could afford to spend the £300 now

Unless you don't plan on working or claiming any benefits in the next 20 years don't waste your money. You only need to work or claim unemployment or incapacity benefit for 7 out of 20 years. I'd keep the 300 and assume I'd earn the years anyway.

How many more years does your state pension forecast that you need for the full new state pension?
The 35 years may not apply to you as you started paying NI before 2016. Anyone with a NI record before then may need anything from 29 to 49 years. The exact number will depend on your circumstances prior to 2016. Eg if you were contracted out. Your forecast will tell you how many more years you need. There is no point paying a missed year if you will achieve it anyway through either working or claiming an eligible benefit.
All the people saying yes obviously are not taking into account that you would have had a recalculation done in 2016 to have the number of years you need.

You cant possibly know that. OP may need anything from 29 to 49 years depending on her personal circumstances and what her recalculation in 2016 came out at.

Not necessarily. OP may need anything from 29 to 49 years. Without her actual forecast giving the number of years she needs you cant say she definitely needs to pay.

Yes

I really wish people that dont understand the transition between the old state pension, SERPS and the new state pension would refrain from answering questions on the state pension. It just causes confusion for the OP and everyone reading.

Why do you say that?

Just be careful thinking like that. It was what I had thought too, I didn't take into account having a stroke at 55 & I'm unlikely to work again (& don't qualify for any benefits that pay your NI).

@elevenpiperspiping I think unless it's going to put you in financial 💩 it's worth doing.

How many years do you need? If you only need a few more, have 20 years to get them and plan on working a lot of those, I wouldn’t bother.