Would you catch up a year (pensions)

As it’s such a relatively small amount I would pay it, you can then forget all about it.

£285 equates to over 2 1/2 years on the lower pension. So if you live beyond 69 years of age, then it would be. However if £285 represents a whole year of NI that suggests you are a low wage earner, so can you afford to pay the £285? My top up is £820 and I’ve been advised not to bother.

I was advised to buy back six years at £800+ each, as doing so would lift my pension by about £50 a week. If memory serves I will have to live to 72 or 73 to break even but will then be in profit.

These things are always a gamble, but remember that pensions go up every year so what might seem like a small increase now will rise over time unless that changes.

Is the £285 for part of a year? If so, if you don’t pay it you will lose the £600 or so you have paid, as only full years count. On balance I would pay unless doing so would cause hardship.

Will this be your only pension?
Do you have grandchildren?

I'd top up if the State Pension would be my only form of income and I could easily afford to do so.
If you've grandchildren and looked after them for a working parent you can claim Specified Adult Childcare credits.

I topped up several years when I got the chance and was also able to defer my pension for a month or two instead of taking it straight away. Both made life more comfortable now, so if you can afford it, I would do it.

What is your current pension forecast? You need to check that to see if you need to pay the missing year or whether you will have enough years by the time you retire.

I was in a similar position to Doodledog, had 5 years shortfall to make up but I reckoned it would take about 3 - 3.5 years to break even. I guess it is a gamble but I don't regret it at all. If you can afford to do it, you will certainly benefit in the long run.

I made up my missing years. For about 3 reasons.

1. I could afford to do so at the time. Never a guarantee that I could always.

2. I am always concscious that a government can change rules at any time. So wanted to top up while it was still financially worth while.

3. A vain reason! I didnt want to have a less pension, even if £2 a week, for the rest of my life, than someone else I know!

Brahumbug

What is your current pension forecast? You need to check that to see if you need to pay the missing year or whether you will have enough years by the time you retire.

Yes, Definitely do this.

Brahumbug

What is your current pension forecast? You need to check that to see if you need to pay the missing year or whether you will have enough years by the time you retire.

I’ve 4 more years to work after this one. If all goes to plan I will work them but who knows what the future holds

Re the above I mean 4 more years of contributions in order to have a full pension in 15 years

Pay it.

I'd recommend strongly "topping up" as many years as you possibly can. People I know who did this, are very glad that they did! Martin Lewis (money expert) recommends this. It's worth looking at this on his website. (You need to act soon; its my understanding the "window of opportunity " for making these additional contributions is closing soon.)

I never regretted "topping up". It made life much easier when I was finally able to claim my state pension! It was a bit of a struggle to manage it as DH had to wait an extra 5 years before he could claim his state pension, but 16 years on, I know it's been a very good investment!

I’m glad I did.
I paid just over £600 to make up contributions around 18 months ago and have already had my money back!

Looks like my original response has not arrived so briefly this is what I was trying to say.

If you don’t pay the £285 this financial year it will very likely be more expensive to pay for that missing year. The cost does go up. This is what I was told by the lady at the state pension department earlier this week as I’m in a similar situation.

I’d suggest paying it as you are very likely to be better off in the long run and will break even after just a few years.

I’m interested to know how you know you only have 4 years left to pay to qualify for a full state pension. In my case I always understood that I needed to contribute for 35 years to qualify for a full pension. I’ve been contributing for 45 years (not including my one ‘missing’ year which doesn’t qualify until I pay £370 for it) and even then I still won’t qualify. I shall have to top up for this year and possibly the one after). That’s because I was ‘opted out’ by my employer’. You may like to see that the same hasn’t happened to you.
It could be that rules have changed and you come under those. I’m a decade older than you.

If the state pension is to be your only source of income and you will have very little in savings once you reach retirement age I’d think carefully about paying extra years to make up a full state pension. At the moment a single pensioner with a pension less than £218 a week has their income topped up by pension credit to the full state pension level and also receives free dental treatment and pays no or very little council tax a saving of roughly £3000 a year. A full new state pension is £221 a week but if you receive that you are not eligible for any pension credit. If you are married the weekly income is set at approximately £341 for a couple. It seems very unfair for someone who has maybe struggled to pay for a full state pension only to find that claiming pension credit would have topped up their pension to the basic state pension level. Although it’s probably nicer not to be on the pension credit benefit, but it is strange that for the sake of an extra £3 a week in state pension you then lose entitlement to the £3000 help from pension credit.

I wish I had topped up my missing years as I feel aggrieved every time ii see DH’s full pension and mine on the bank statement! I always feel especially aggrieved as unlike my best friend who had her children later my early child rearing years didn’t count.

Lyn57, I hadn’t realised those figures. It seems especially unfair as I think pension credit opens up other benefits (if I am right about this).
Doesn’t apply to me as I have a work pension as well but for those that do your post is a consideration.

I would definitely top up your pension. I did several years ago and am feeling the benefit of it now with a full pension.

Have you have been “contracted out” by your employer, so you will get some pension from that employer ? If so then to get full state pension you have to continue to pay contributions until your actual retirement age.
I didn’t realise. I had well over the required number of years to get a full pension, or so I thought (43 full years).
Left work at 60 with a tiny works pension (for various health and caring reasons) only to find at 66 I was at least 5 full years contributions short. They don’t seem to count years if you’re contracted out, they expect full contributions every year until retirement age.

Pearl30

Looks like my original response has not arrived so briefly this is what I was trying to say.

If you don’t pay the £285 this financial year it will very likely be more expensive to pay for that missing year. The cost does go up. This is what I was told by the lady at the state pension department earlier this week as I’m in a similar situation.

I’d suggest paying it as you are very likely to be better off in the long run and will break even after just a few years.

I’m interested to know how you know you only have 4 years left to pay to qualify for a full state pension. In my case I always understood that I needed to contribute for 35 years to qualify for a full pension. I’ve been contributing for 45 years (not including my one ‘missing’ year which doesn’t qualify until I pay £370 for it) and even then I still won’t qualify. I shall have to top up for this year and possibly the one after). That’s because I was ‘opted out’ by my employer’. You may like to see that the same hasn’t happened to you.
It could be that rules have changed and you come under those. I’m a decade older than you.

Thankyou. You can get your forecast on the government site and it tells me how many more years I must contribute before I will have a maximum pension benefit

Ceejayjay. Thanks for clarifying. I regularly check my forecast and it states I may have to pay more each year even when the extra has been paid. Looks like I’ll be paying in until return age, but I’ll stay hopeful that I need to pay no more. Can’t help but feel that the 15 or so years of additional NI payments I’ve made is more than the benefit of contracting out (I wasn’t consulted on that). Fortunately I have a private pension too.
I found the person at state pension department very helpful so maybe discuss your situation with them.
BTW I’m going to apply for grandparent carer and hopefully that will mean my missing year(s) will be credited with the GCs parent’s NI contribution paid through the family allowance. That way I don’t need to pay the additional sum.

Have you checked how many years you have already contributed to NI payments? You can check them here - www.gov.uk/check-national-insurance-record. You can also request a written statement from here, too. I received several letters telling me I had missing years but chose not to pay them. I checked them in later years to make sure I had enough contributions and I had 45 years. I would say check your contributions first and if you're on target for the minimum number of years (was 35 but don't know if it's been changed) I wouldn't. Plus you are credited until your youngest child is 16. I was really surprised I had 45 years when I checked. I retired when I was 67.