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Retirement

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LISA vs NI for state pension

2 replies

potonata · 29/01/2023 11:42

Hello,
I have moved to this country 14 years ago. Have been a employee for a few years and have contributed NI partially over the years.
I have a Lifetime ISA whereby contribution 4k gives you 1k , but locked until 60 years of age.
I would like to find out how to calculate what is more efficient:

  1. voluntary contributions of the missing NIs (£800 /year for the years I've missed), vs
  2. Saving £4k for the 1 year, to get £1k in the LISA

How can I calculate?

OP posts:
Morph22010 · 29/01/2023 11:53

You have to be under 40 to start is lifetime Isa and they started in 2017 so I’m guessing you are 45 maximum so have 23 years left to retirement. You need 35 years total for full state pension, you don’t get anymore pension if you have more than 35 years. So what you need to work out is if you are likely to hit the 35 years based on what you’ve made so far and the years you have left as if you are it’s not worth topping up the ni. You also get ni credit for For any years you were in receipt of child benefit for a child under 12 even if not working. You can look at your online tax account to see how many years you have already

Cornelious2011 · 29/01/2023 11:59

You can only pay into your LiSA until you're 50, so could you pay into it until then, then increase NI contributions for 17/18 years. Would that give you 35 years?

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