Paying up a National Insurance stamp for a full pension

[Weihrauch17]

I took early retirement 3 years ago due to Covid and when I retired I checked on the Govt website and I owed £1500 or so for a full pension at retirement age.  I didn't pay it then because I may not reach 67 as you never know what is round the corner.  I tried to log on my Govt account today but they have closed my account as I hadn't logged on for 3 years.  Does anyone know if there is a time limit for paying my stamp up, I am 58.  Thanks. 

[TIGHTCHOKE]

Go on to the Martin Lewis website, https://www.moneysavingexpert.com/ There is plenty of advice on their for your query.

[Weihrauch17]

Thx.

[macca2017]

Not answering your question I know, but I do know if you have looked after grandchildren while the parents are working after retirement you can claim the time toward your NI contributions, as Tightchoke  says, Martin Lewis is your man.  

[Spr1985]

I believe it is six years from due. So as an example :- if you have an under funded year for 2017, This year 2023 is the final opportunity to pay it. 

getting access to your information on the .gov website is very easy (I’ve looked at mine recently) and lists contributions, years, underpayments etc 
 

[Scully]

I checked mine maybe three months or so ago, on the advice of my accountant. 
The time limit expired a while ago, but that may have just been for me personally and I no longer have her email sorry. 
So yes, there is a time limit. 
You can simply google the question ( as I did ) or as has been suggested visit Lewis’ website. 
Edited: Just found it surprisingly, and post part of it here:

Edited July 18, 2023 by Scully

[Weihrauch17]

31 minutes ago, Spr1985 said:

I believe it is six years from due. So as an example :- if you have an under funded year for 2017, This year 2023 is the final opportunity to pay it. 

getting access to your information on the .gov website is very easy (I’ve looked at mine recently) and lists contributions, years, underpayments etc 
 

Thx I have tried setting up a new account and have found it impossible as I don't have a current passport, won't use their AP and haven't had any loans, phone contracts etc for years so they can't verify my identity.  It says I can use tax data but then doesn't give the option.  Totally infuriating. 

[JohnfromUK]

3 minutes ago, Weihrauch17 said:

I have tried setting up a new account and have found it impossible as I don't have a current passport, won't use their AP and haven't had any loans, phone contracts etc for years so they can't verify my identity.  It says I can use tax data but then doesn't give the option.  Totally infuriating.

It is.  I had a big struggle getting my Gov't gateway account when I retired (my passport had expired and my driving license was the old paper sort).  I did it in the end through Experian I think, but then about 2 years later the Gov't parted with Experian and thier 'validations' then expired a time afterwards and so I had to start all over again.  On the second time it was a bit easier as by then I had a passport again.  Unfortunately they are really hard to contact now by phone (they were hard with up to an hour waiting time when I originally retired 6 years ago, but I understand are near impossible now).

[Bobba]

Not that it concerns me - most fortunately. But I received this from Chase de Vere yesterday. So I thought I would share. copy pasted so apologies for text size etc

NICS DEADLINE DEFERRED, AGAIN

13 July 2023

If you were planning to fill the gaps in your national insurance contributions (NICs) record by 31 July, you no longer need to rush or worry – you now have until 2025.

As is often the case with financial deadlines, publicity in the form of press stories and subsequent public awareness often arrive late in the day, and in the case of voluntary NICs, this has caused the Department for Work and Pensions and HMRC to reassess its July deadline.

Back on 7 March, the government was forced to extend the deadline from 5 April to 31 July. In addition, the Treasury said that all voluntary contributions would be payable at 2022/23 rates – a useful perk when the main voluntary rate (Class 3) was raised by 10.1% for 2023/24 to £907.40 a year. It seemed highly unlikely that there would be any further extension of the deadline beyond July, but in mid-June, the government announced a further deferral, all the way out to 5 April 2025.

Why it matters

The introduction of the new state pension in April 2016 was one of the most significant reforms to state benefits in decades. If you did not reach state pension age before 6 April 2016, there were two important adjustments to rules relating to pension entitlement and NICs:

• The period of NICs (including any credits) required to obtain a full pension was increased from 30 tax years to 35 tax years; and
• The corresponding minimum period for entitlement to any pension benefit moved from just one year to ten.

These changes left some people worse off, particularly those with contribution records of under ten years. To mitigate the effects, the government relaxed the rules permitting voluntary NICs to be made to fill in any missing years. These had normally only been payable for a maximum of the previous six tax years, but a temporary extension of the backdating period was introduced to allow voluntary contributions to cover the years from 2006/07 onwards, after which voluntary contributions could only have been made to cover periods from 2017/18 onwards.

If you have any gaps in your NICs record between April 2006 and April 2017 – even if you have now passed state pension age after 5 April 2016 – this is now (almost) certainly your last opportunity to fill them. However, it will not always be beneficial to make the top up, so you should seek advice before making any payments.

The Financial Conduct Authority does not regulate tax or benefit advice.

[Lloyd90]

You only need so many years of full contributions to get full state pension. 
 

I have missed 2 years worth when working abroad I think but should have enough full years that it doesn’t matter. 
 

Make sure you check this as you don’t want to pay £1500 and then find out you had enough years anyway and paid for nothing. 

[welsh1]

22 minutes ago, Lloyd90 said:

You only need so many years of full contributions to get full state pension. 
 

I have missed 2 years worth when working abroad I think but should have enough full years that it doesn’t matter. 
 

Make sure you check this as you don’t want to pay £1500 and then find out you had enough years anyway and paid for nothing. 

10 years to qualify for state pension - 35 years for full state pension.

[redleg in kale]

On 19/07/2023 at 15:34, Lloyd90 said:

You only need so many years of full contributions to get full state pension. 
 

I have missed 2 years worth when working abroad I think but should have enough full years that it doesn’t matter. 
 

Make sure you check this as you don’t want to pay £1500 and then find out you had enough years anyway and paid for nothing. 

hi lloyd 90, dont be thinking as idid only needing 35yrs contributions , i had 36yrs full employment with my last employer and made redundant age 58yrs , with a good pay off and not looking for further employment , waiting for state pension forecast at  65yrs only to be told at 66yrs your 8yrs short of contributions, contributions years  are counted backwards from 66yrs. STILL SEETHING.

[JohnfromUK]

11 minutes ago, redleg in kale said:

hi lloyd 90, dont be thinking as idid only needing 35yrs contributions , i had 36yrs full employment with my last employer and made redundant age 58yrs , with a good pay off and not looking for further employment , waiting for state pension forecast at  65yrs only to be told at 66yrs your 8yrs short of contributions, contributions years  are counted backwards from 66yrs. STILL SEETHING.

I don't know what is going on there.  Perhaps part of your time was 'contracted out'?  I was similar to you - early retirement at 59 and I had 38 (think it was 38, but more than 35 anyway) years full contributions, one year missed very early on - too early to 'top up' anyway even if I had needed to. 

I checked up (state pension forecast) at the time of retirement and I was eligible for full state pension (plus some small extra SERPS legacy amount) starting from my 66th birthday - and no 'topping up' needed.  So from aged 59 to 66 I was 'early retired' and lived from savings/payoff - and my full state pension started (and it did start on time and in full) at 66.

[TOPGUN749]

15 minutes ago, redleg in kale said:

hi lloyd 90, dont be thinking as idid only needing 35yrs contributions , i had 36yrs full employment with my last employer and made redundant age 58yrs , with a good pay off and not looking for further employment , waiting for state pension forecast at  65yrs only to be told at 66yrs your 8yrs short of contributions, contributions years  are counted backwards from 66yrs. STILL SEETHING.

Contributions whether paid through National Insurance or credited as a student or registered unemployed start at age 16. I started work at 19, had several jobs over the years and some lengthy spells of unemployment.I stopped work at 63 to live off savings,and have 48 full years on my Gateway record . The 35 years needed can be any 35 years between 16 and 66,and not a continuous run.I get my full pension in September this year. I added up my National insurance contributions and found I had paid over £30,000 in personally which with interest is far more in today’s money.Think the first 10 years of pension will be my money back,after that it’s a bonus!😊😊

[steve_b_wales]

When I checked on my NI contributions, I found out that there were a few years that they hadn't been paid. A couple of them were due to my very first employer(I was 17) not paying them, and a few more when my EX wife didn't pay them when I was self employed for a few years (she did the books etc) but I still had enough years paid in to qualify for the full amount. Now aged 66, and still working full time, I get the 'fantastic large amount' of £815:40 pm, but thjis is class as income and as such, is added to my wages and taxed. I no longer pay N.I. contributions, but I'm taxed a hell of a lot out of my monthly pay.I do think it's unfair that something that I've paid into for 50 years should be taxed, if I'm still in employment.

[JohnfromUK]

1 minute ago, steve_b_wales said:

I do think it's unfair that something that I've paid into for 50 years should be taxed, if I'm still in employment.

I'm retired - but still pay tax on my pension (which is part state pension and part 'work' - i.e. employer arranged pensions), the total of which is taxable.  The argument goes that we had tax relief on paying money into pensions, but they are taxed on 'paying out'.

ISAs on the other hand are 'paid into' from taxed income, but the 'pay out' is (currently anyway) tax free.

It is therefore (hindsight is a wonderful thing!) to save into a mix of pensions and ISAs, taking some tax relief on the way in (pension) and some on the way out (ISA).

[London Best]

Steve, your state pension is not taxed, it’s your income from working which takes it over the threshold.

Edited July 23, 2023 by London Best

[steve_b_wales]

Just now, London Best said:

Steve, your state pension is not taxed, it’s your income from working which takes it over the threshold.

Yes, I agree that it, in itself, is not taxed, but as it's extra 'income' it affects my tax code etc. It's unfair that, as I have decided to continue to work, the state pension is taken into account of earnings. It should be completely separate and tax should only be paid on earnings due to being employed (this will never happen of course)

[London Best]

3 minutes ago, steve_b_wales said:

Yes, I agree that it, in itself, is not taxed, but as it's extra 'income' it affects my tax code etc. It's unfair that, as I have decided to continue to work, the state pension is taken into account of earnings. It should be completely separate and tax should only be paid on earnings due to being employed (this will never happen of course)

I have other pensions beside the state pension. Obviously, that takes my income over the tax threshold. Obviously, any excess is taxed. 
It’s no good moaning about it, it’s the same for everybody, so nobody is better or worse off than the next man.

[Lloyd90]

21 hours ago, redleg in kale said:

hi lloyd 90, dont be thinking as idid only needing 35yrs contributions , i had 36yrs full employment with my last employer and made redundant age 58yrs , with a good pay off and not looking for further employment , waiting for state pension forecast at  65yrs only to be told at 66yrs your 8yrs short of contributions, contributions years  are counted backwards from 66yrs. STILL SEETHING.

That definitely doesn’t sound right; who told you that? 

[TOPGUN749]

My state pension plus my personal pension are still under the £12570 tax threshold,so luckily no tax to pay,but if the pension rises next year and threshold doesn’t I will pay a bit,unfortunately.Managed to get a frozen pension paid out tax free too by not working in the tax year when claiming it .

[oowee]

This will not apply to all but if you want to purchase additional years, it is worth checking which years are best to purchase. It may be the case that you have part paid for some years and these are the years will be the cheapest to top up. When you call the state pension helpline they will tell you the best years to buy unlike the inland revenue, when you come to pay. 

[redleg in kale]

8 hours ago, Lloyd90 said:

That definitely doesn’t sound right; who told you that? 

HI Lloyd, DEPARTMENT FOR WORK  AND PENSIONS , by letter and phone call , after phoning them several times over a 3month period for an explanation about my state pension reduced payments, my school leaving age was 15yrs , and from 15 yrs to 21yrs i had few jobs then at 21yrs i was empolyed by my last employer for 36yrs , for 43yrs i have never been unemployed and paid all my dues ie NICS. i have a deduction of £55.46p for contracted out deductions, +post2016 rules because i was made redundant at 58 and did not make any NICS payments from 2014 upto 2022 ihad a shortfall years , so my payment state pension is £651.48 p paid every 4wks so a good shortfall in payment,it is a complete minefield , if you would like to P M me with mob number i ii whats app some phots of the letters explaining the reduced payments , hope you can make sense of this ,

[Bobba]

16 hours ago, oowee said:

This will not apply to all but if you want to purchase additional years, it is worth checking which years are best to purchase. It may be the case that you have part paid for some years and these are the years will be the cheapest to top up. When you call the state pension helpline they will tell you the best years to buy unlike the inland revenue, when you come to pay. 

It can be a long, long, haul with falls at the final hurdle. For the past 12 years our son has worked in Singapore and now Oz. Wanting to top up his pension the waits for the helpline and in correspondence was like drawing teeth and getting blood from a stone. Finally, the appropriate years plus sum ££ necessary was notified, plus paying in procedures and reference number which he followed precisely. Many weeks after the event a letter for him has arrived here (we’re his UK post box) it said we’ve received £x from you but what is it for? Please advise with any reference numbers. He’s spitting blood. Being in IT and audit trails he has complete transaction records to demonstrate he did what he was told. Yet they still got it wrong.

[oowee]

6 hours ago, Bobba said:

It can be a long, long, haul with falls at the final hurdle. For the past 12 years our son has worked in Singapore and now Oz. Wanting to top up his pension the waits for the helpline and in correspondence was like drawing teeth and getting blood from a stone. Finally, the appropriate years plus sum ££ necessary was notified, plus paying in procedures and reference number which he followed precisely. Many weeks after the event a letter for him has arrived here (we’re his UK post box) it said we’ve received £x from you but what is it for? Please advise with any reference numbers. He’s spitting blood. Being in IT and audit trails he has complete transaction records to demonstrate he did what he was told. Yet they still got it wrong.

So frustrating. Could he not call inland revenue and make a payment with a card? 

My wife will soon be in the same boat. She has finished work this year and will want to buy additional years upto retirement age (around 20 additional years).