Have I got that right?
Moved from Retirement Investing to Pensions Practical, leaving a link, to make Lemons there aware of this question. - Chris
Thanks to Rhyd6,eyeball08,Wondergirly,bofh,johnstevens77, for Donating to support the site
Clariman wrote:Have I got that right?
Clariman wrote:Due to being partially contracted out and a period of part-time work, my other half's state pension is going to be about 20% short of the maximum. At first site, the voluntary contributions seem like a no-brainer. £741 for last year would give her £4.70 a week, which pays for itself after 3 years of pension. So I guess the gamble is that she lives more than 3 years after pension age.
Have I got that right?
Rates
The rates for the 2018 to 2019 tax year are:
£2.95 a week for Class 2
£14.65 a week for Class 3
Clariman wrote:Due to being partially contracted out and a period of part-time work, my other half's state pension is going to be about 20% short of the maximum. At first site, the voluntary contributions seem like a no-brainer. £741 for last year would give her £4.70 a week, which pays for itself after 3 years of pension. So I guess the gamble is that she lives more than 3 years after pension age.
Have I got that right?
PhaseThree wrote:I see two main risks in paying voluntary NI contributions. The first being longevity risk (You may be dead before you get to collect) and the second is political risk (Some government may decide to means test the state pension). To guard against this risk I intend to make contributions until I have 29 years on record then stop. You are allowed to back date 6 years of contributions, so a few months before my state retirement date I will make 6 years payments if it is still in my interest to do so at the time.
PhaseThree wrote:You are allowed to back date 6 years of contributions, so a few months before my state retirement date I will make 6 years payments if it is still in my interest to do so at the time.
monabri wrote:Just a note
Check this... only buy new years from 2016/17 onwards...do NOT buy missing years of NI contributions from before tax year 16/17.
pochisoldi wrote:monabri wrote:Just a note
Check this... only buy new years from 2016/17 onwards...do NOT buy missing years of NI contributions from before tax year 16/17.
Why?
Hint: Recommendation + justification makes for a more valuable post...
monabri wrote:A few months later you receive confirmation of the payment by post.
ursaminortaur wrote:pochisoldi wrote:monabri wrote:Just a note
Check this... only buy new years from 2016/17 onwards...do NOT buy missing years of NI contributions from before tax year 16/17.
Why?
Hint: Recommendation + justification makes for a more valuable post...
When the new system began in 2016 a starting amount was calculated which was the maximum under the new system or under the old system of old state pension + Serps/S2P. If the calculation which maximised your starting amount was done on the old system then filling in contributions before 2016 are probably pointless since they would at most boost the old state pension element (which only required 30 years of NI contributions anyway rather than the 35 required for the new system). Hence If you already had 30 years of NI contributions and your starting amount was calculated under the old system but was less than the full new pension amount then making extra pre-2016 contributions won't increase your starting amount and hence won't increase your final state pension.
mc2fool wrote:I wrote up how the calculations under the old and new systems, and the "starting amount" at April 2016, work on TMF which folks may find useful. The numbers have changed since, and COD+RDA for the new system is now called the COPE, oh, and where it says "current" state pension it, of course, would now read "old" -- but otherwise the explanation is still good . It's archived at http://boards.fool.co.uk/firstly-as-a-m ... 01655.aspx
vrdiver wrote:I followed your link, but sadly it says "can't be reached". Any chance of reposting?
monabri wrote:You can pay quarterly to HMRC or simply by writing a cheque for the full amount for the year you are buying.
I accompany the cheque with a short note saying what the cheque is for ( class 3 voluntary NI for year xxxx/yyyy, my full name,address and contact details and NI number ( also write the NI number on the front of the cheque).
A few months later you receive confirmation of the payment by post.
Return to “Pensions - Practical Problems”
Users browsing this forum: No registered users and 26 guests