State Pension: deadline extended for making NI payments to cover missing years

[1nvest]

From my online NI query it indicates

You can get your State
Pension on 5
December 2026
Your forecast is £203.85 a week,
£886.38 a month, £10,636.60 a
year

You need to continue to contribute National
Insurance to reach your forecast
Estimate based on your National Insurance record up to
5 April 2023
£195.23 a week
Forecast if you contribute another 2 years before 5 April 2026
£203.85 a week
£203.85 is the most you can get

Present position is that I'm retired (occupational pension). Should I pay the additional two years NI, and if so how to go about doing that? Become self employed and pay Class ... whatever (???) contributions?

[UncleEbenezer]

I too have a small gap.

I've been wondering whether the reduction in NI rates might lower the cost to me of plugging that gap? In other words, will it be cheaper to buy 2024-5 and later years than earlier ones?

[Lootman]

I too have a small gap.

I've been wondering whether the reduction in NI rates might lower the cost to me of plugging that gap? In other words, will it be cheaper to buy 2024-5 and later years than earlier ones?

That is a nice idea but I suspect not since the deal is a bargain. I calculated at the time I bought back years that the payback period was just 3 years. As I recall the cost (class 3) was about £600 a pop, and each year purchased got me an extra £200 or so a year of extra SP.

Just make sure not to buy more than you need. For me anything over 30 years would have been a waste.

[ukmtk]

I think that you have until next year to pay for missing years to about ~2001.
I have been buying them for my wife (she had less than 10).
You can actually pay NIC3s by DD - which is what I'm doing for her - for current tax years.
If you wish to pay outright you can only go back 2 (or possibly 3) years at that year's rate.
Otherwise they are all at this year's rate which is currently £17.45 for a week or £907.40 for a year.
I think it takes 3 years pension payouts to make a profit.

[chas49]

From my online NI query it indicates

You can get your State
Pension on 5
December 2026
Your forecast is £203.85 a week,
£886.38 a month, £10,636.60 a
year

You need to continue to contribute National
Insurance to reach your forecast
Estimate based on your National Insurance record up to
5 April 2023
£195.23 a week
Forecast if you contribute another 2 years before 5 April 2026
£203.85 a week
£203.85 is the most you can get

Present position is that I'm retired (occupational pension). Should I pay the additional two years NI, and if so how to go about doing that? Become self employed and pay Class ... whatever (???) contributions?

The answer is yes (probably) - if you can make Class 2 NIC contributions, you'll increase your pension by £8.62 a week (£448.24 a year). NIC 2s will cost £179.40 for a year at current rates. If you can qualify to pay Class 2, it's a no-brainer. The only way you lose out is if you die within 6 months (roughly) of qualifying for SP.

[1nvest]

From my online NI query it indicates

You can get your State
Pension on 5
December 2026
Your forecast is £203.85 a week,
£886.38 a month, £10,636.60 a
year

You need to continue to contribute National
Insurance to reach your forecast
Estimate based on your National Insurance record up to
5 April 2023
£195.23 a week
Forecast if you contribute another 2 years before 5 April 2026
£203.85 a week
£203.85 is the most you can get

Present position is that I'm retired (occupational pension). Should I pay the additional two years NI, and if so how to go about doing that? Become self employed and pay Class ... whatever (???) contributions?

The answer is yes (probably) - if you can make Class 2 NIC contributions, you'll increase your pension by £8.62 a week (£448.24 a year). NIC 2s will cost £179.40 for a year at current rates. If you can qualify to pay Class 2, it's a no-brainer. The only way you lose out is if you die within 6 months (roughly) of qualifying for SP.

Thanks chas49. Can guarantee that I'll shed no tears if I die within 6 months of SP qualification

Reading through https://www.att.org.uk/technical/news/c ... april-2024 even if I opt to be self employed where profits are very low, there's still the option to pay voluntary Class 2 (£3.45/week) that counts towards state benefits.

Glad to have found out sooner rather than later as I had thought I'd already contributed more than enough years to be on the full pension.

[chas49]

The answer is yes (probably) - if you can make Class 2 NIC contributions, you'll increase your pension by £8.62 a week (£448.24 a year). NIC 2s will cost £179.40 for a year at current rates. If you can qualify to pay Class 2, it's a no-brainer. The only way you lose out is if you die within 6 months (roughly) of qualifying for SP.

Thanks chas49. Can guarantee that I'll shed no tears if I die within 6 months of SP qualification

Reading through https://www.att.org.uk/technical/news/c ... april-2024 even if I opt to be self employed where profits are very low, there's still the option to pay voluntary Class 2 (£3.45/week) that counts towards state benefits.

Glad to have found out sooner rather than later as I had thought I'd already contributed more than enough years to be on the full pension.

Not that it is likely to change your decision, but I made a small error in the calculation! If you buy two years of Class 2 NICs before you reach SP date, it'll cost you a total of £358.80 (at current rates), and you'll gain £448.24 a year. So you'll have to stay on the perch for 9.6 months from SP date to breakeven!

[mc2fool]

Thanks chas49. Can guarantee that I'll shed no tears if I die within 6 months of SP qualification

Reading through https://www.att.org.uk/technical/news/c ... april-2024 even if I opt to be self employed where profits are very low, there's still the option to pay voluntary Class 2 (£3.45/week) that counts towards state benefits.

Glad to have found out sooner rather than later as I had thought I'd already contributed more than enough years to be on the full pension.

Not that it is likely to change your decision, but I made a small error in the calculation! If you buy two years of Class 2 NICs before you reach SP date, it'll cost you a total of £358.80 (at current rates), and you'll gain £448.24 a year. So you'll have to stay on the perch for 9.6 months from SP date to breakeven!

Actually the first year will get him an extra £302.86pa for an outlay of £179.40, so a payback period of 7.1 months. The second year though will only add an extra £145.38pa for the same outlay, so that'll have a payback period of 14.8 months.....

[1nvest]

Not that it is likely to change your decision, but I made a small error in the calculation! If you buy two years of Class 2 NICs before you reach SP date, it'll cost you a total of £358.80 (at current rates), and you'll gain £448.24 a year. So you'll have to stay on the perch for 9.6 months from SP date to breakeven!

Actually the first year will get him an extra £302.86pa for an outlay of £179.40, so a payback period of 7.1 months. The second year though will only add an extra £145.38pa for the same outlay, so that'll have a payback period of 14.8 months.....

Is that RPI or CPI based? Only kidding, I got gist from chas49's first post (and noticed the error but didn't bother say anything as I generally work along more artful than scientific precision lines). Basically pays if I live for a number of years, otherwise was a cost that if I'm dead I wont care about anyway.