Nat Ins Contributions - Missing Years

If you are going to be paying tax on your various Pensions then the £18.90 will be taxed as apart of your earnings.
ISA’s are tax free.
Might be best to leave the ISA alone?

137 weeks is not that long. I think it would be well worth it. The only thing that might make me hesitate in your position, is if that would leave you with little or no savings to use for emergencies.

If it’s less than 3 years for payback I’d be tempted to pay the missing years. Perhaps Citizens Advice or one of the organisations such as age concern might help with advice.

I paid back six years, ten years on that has made a huge difference. I’d say do it.

Do you have missing years because of being contracted out, or because you weren't working?

If it's the former, then you will have the best of both worlds by paying fir them - you'll get the contributions paid by your employer towards your occupational pension as well as those paid by the government if you pay voluntary contributions. That's how it was explained to me, anyway. I was contracted out and 'owed' seven years, even though I have well over the 35 years full contributions supposedly required for a full pension, so am paying voluntary contributions until my SPA kicks in.

If you have missing years because you didn't work and have no other pension, you may be better off not paying, because pension credit will bring you up to the level that those who did work will get. I assume that that will depend on how much you have by way of savings though - as usual, means testing will take account of anything you have put aside for your older age.

It might be better to contact the Pensions Advisory Service (free) and ask them to look into your particular case, as the state pension is far from straightforward.

I will not get a full SP when I retire 2023 even though I have 41 years, I contracted out and my occ pension has been taken into account.
I am not paying the the extra years to bring it up to the number I need as I will be taxed on it.
Look at your personel
circumstances and see what is best for you. Everyone is different.

With the SP changes in 2016 I was short too. My IFA said it was a good investment, so I used some of the equity from my house sale and paid for three years from 2016. No acknowledgement the payment had been received, and it took about three months for them to process the payment.

I paid off about 2-3 years as I had not been working. At the time I felt it would be worth it. If you do decide to top up, keep all correspondence saying you have done this. I found their record- keeping wasn't the greatest. They made a mistake in mine, they did correct it after writing to them but it made me wary and Ive kept all correspondence with them. I won't get my State Pension until 67( unless they change it again).

Not personally, but I have had a couple of relatives in a similar position and have sat down with them to do the calculations.
You can make a fair guess about your longevity if you know your 'blood' family. Look at the data for average age at death in your area. Think about your mum, nans, & related aunts - did they die at around about that age? If they died younger could you relate it to something specific like smoking or industrial disease? Any other hereditary factors or something going on at the moment with you?

So not too difficult to work out if you've got almost 3 years left.

Broadly it is reckoned that you are better getting pension years (as they get uprated with inflation) that keeping savings.

Hope that helps!

I retired at 60 and continued to pay for some previous missing years. I was advised by someone at the tax office that it was worth it in order to get the maximum state pension and that I would recoup this in 2 years. Although it was a bit of a struggle I have no regrets and enjoy the higher level of pension now.

Slightly off topic, sorry, but a friend of mine has retired and is deferring her state pension. She owes a few years for being contracted out. Does anyone know if she can still pay the missing years, or has she left it too late now she is pension age?

I was a servant for 36 years and was contracted out I and my friends discovered our state pensions would be lower than we expected,
I thought about it and decided to put £3000 into my contributions on the basis that if I lived for 3 years after the start of my pension being paid it would be beneficial so fingers crossed.
I thought it was a good decision and spoke to a very nice lady at the DWP.,so perhaps a phone call to them would guide you through it.

Doodledog’s advice is spot on Winterday. I would contact Citizens Advice or Age UK for a benefit check. Their information will be comprehensive and right up to date ( it is also free ! ) Your Specialist may not be aware of the many nuances involved in claiming benefits. It is a difficult position to be in to be just above the Pension Credit level as you would miss out on so many other benefits i.e. council tax benefit, housing benefit and help with prescription glasses amongst others. At the end of the day, if it was in your best interests to pay the missing contributions, they would advise you to and you would then have the peace of mind to know you had made the right decision. Good luck with it all !

Just a general warning. Nobody should buy in any years before checking with the DWP and HMRC and getting a statement as to what difference it will make. I very nearly paid for one missing year that wouldn’t have affected the amount I got at all, and I was told I wouldn’t have had it refunded once I’d paid.

Also, if you’ve done any childcare at all for your grandchildren or other young relatives, even a few hours over a short period, you could be entitled to free NI credits.

www.gov.uk/government/publications/national-insurance-credits-for-adults-who-care-for-a-child-under-12-fact-sheet/specified-adult-childcare-credits-fact-sheet

Same for me, I had 4 years missing contributions due to being contracted out. After taking advice I paid the missing years in a lump sum, the pension people were very helpful but 3 months after I paid it still not showing on statement. A quick call sorted it. It gives me an extra £25 a week.
Yesterday I received my first state pension payment, just got to live over 3 years to get be quids in.?
As NannaRose says you are on the whole better getting extra pension for increased years, as pension increases year on year and the longer you live the better off you will be.
But I wouldn’t have used all my savings as need some for rainy day.

I thought each year only gave an additional £5 per week 1summer?

Yes you are right Shandy57 just checked my paperwork , I paid an additional 5 years. Each year paid was worth £5.13 per week so I have an additional £25.65. I paid £3978 so 3 years and 1 week I am quids in. I think thats correct.

I had a look at my pension today on gateway,I’m due to receive my state pension next year, it’s says I have four missing years, but paying into these years will not increase my pension amount. Does anyone know why this could be.

Are they pre2016 Katyj? Any years before the changes won't register as an increase.

Oh I see. Thank you Shandy I’ll have to go back on and have another look.

There's a forum on MSE about Pensions and several people have posted about buying additional years.

www.moneysavingexpert.com/savings/state-pensions/

Did you do any grandchild care? I’ve added two missing years for free as I filled in the “ specified childcare” form. My step daughter was working 2 days a week and we looked after the baby one day a week. She wasn’t using her NI from child benefit so someone else can claim to instead. This is not published so I make it my mission to spread the word.
Husband had enough contributions so I had them instead. No minimum hours required and no proof required other than daughters NI record checked.
I’m only 2 years short now. Naively, I didn’t know my teachers pension meant I was opted out for part of my earning life.
I can claim for one more year of childcare which will be after my pension starts in September .
Claims can be backdated for a number of years.

Hi Shandy there are 6 years in total not full, two before 2016 and four after, two of those were during the pandemic when I spent some time on furlough so
not sure if they’ll count .
It says I cannot improve my forecast any more and I should receive £9371 PA although this is not guaranteed.

That looks like the full state pension, Katyj.