National insurance contributions

gypo

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Afternoon all,
Am I right in thinking that if you have 35 years of national insurance contributions in and then gave up work to go full timing in the van living off a small pension you would no longer need to pay NI contributions?
Thanks
 

gypo

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Ok thank you both, I will check.
I should have added I will only be 55 living off a small works pension until state pension age
 

TeamRienza

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NO DEFINITELY NOT. The national insurance based state pension scheme changed in 2016 to become the new state pension scheme. You may have the required max number of years to get you the old pension rate of about £129. But if you wish to get near the full current rate (about £179) you will have to contribute to each year from 2016 until the state retirement age or until you have the ‘new’ maximum required number of years.

Search this on google or you will find it has been discussed on here in the past. You need to get registered with the pension service and look at your record of contributions and what you might get. Be aware that most of the forecasts have about 3 estimates and are usually based on an assumption of continuous contributions until state retirement age.

I had to top up my pension contributions by purchasing around 3 extra years (2 years ago) @ approx £880 (I think) for each year. Each year gets you about £4 per week extra. Buying extra years is a no brainier assuming reasonable health and life expectancy. I am about to buy about 6 years for my wife to boost her state pension as she retired early. Also be aware that as far as I can tell there is no longer a ‘widows’ pension. It is all now based on individual contributions.

Davy
 
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gypo

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Thank you Davy for the detailed explanation.
I will register and see what I can find out
 

gypo

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Another question coming from a slight different angle,
Am I legally bound to pay NI contributions up to state retirement age, if I retire now on a small private pension and have already paid NI for 35yrs?
 

TeamRienza

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I just amended the figures to current year. Do check it out carefully as I fear many will be caught out by the changes. If it comes to buying extra years, but you have the full number for the old state pension, then do not buy any years before 2016 /17 as they will not boost your new pension income although the government will quietly accept the money!

Also be aware that if you have small grandchildren that you mind or collect from school (does not have to be every day or full time) etc you can apply for this to be recognised as ‘work’ and apply for credit for the tax years involved as national insurance contributions. I got my brother in law who retired early to do this and it has saved him over £1500 in buying back years. His wife is about to claim for other grandchildren from one of their other families kids. They are in line to save another £3000 plus when it is processed.

Davy
 

wildebus

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I think the new number is 39 full years, up from the 35 previously.

The cost per year to top up varies, but I don't think it is at the level of £880 a year? Costs me around £200 or so (it may depend what class you are able to top up with I guess).

Just logged onto HMRC and I see:
  • 36 years of full contributions
And "Forecast [for full pension] if you contribute another 3 years" - so it is 39 years
 

wildebus

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Another question coming from a slight different angle,
Am I legally bound to pay NI contributions up to state retirement age, if I retire now on a small private pension and have already paid NI for 35yrs?
depends on income. below a certain income, no.
 

TeamRienza

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One of the figures that will be quoted when you get the estimate from the pension service will show what your contributions have gained you to the date of asking, however the best figure will be the one based on your continued contributions to state retirement age. As someone else mentioned, if you were contracted out ( usually government related jobs) the reduced figure will also be shown.

Davy
 

harrow

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Afternoon all,
Am I right in thinking that if you have 35 years of national insurance contributions in and then gave up work to go full timing in the van living off a small pension you would no longer need to pay NI contributions?
Thanks

Except if your NI had been contracted out at any time. I did 40 years and need another 6 years. :unsure:
 

TeamRienza

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depends on income. below a certain income, no.

I would assume this will still require you to be working, just not earning sufficient to contribute. If you are not on the system you will presumably not get the credits. At the very least you will need to be claiming universal credit. This is almost impossible to gain if you are often travelling as my brother in law found when he tried to holiday often in the years immediately after his early retirement.

Davy
 

wildebus

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An associated aside ...
This thread prompted me to just check something I've been meaning to do for ages!

If you check your NI Record you might see something like this:

1618853098611.png


Which looks like you are missing years of contributions? But click on the details and you may see ...
1618853199617.png

So "Year is not full" may not actually mean that the year is not full, just they haven't done the maths yet.
I just checked my account for 2017-2018 and 2018-2019 and both years I have made the right amount of NI Class contributions as requested so those ARE Full years. A bit misleading if you are trying to work out how many more years you actually need as a minimum.
 

Budgie

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I am 57 was contracted out for 20 years from age 16 in luckily a good final salary pension scheme, went self employed until 2018, now retired living off savings can take my private pension but going to leave it until later, but still need 4 years NI voluntary contributions @ £14 odd x 52 weeks per year to qualify for the full stakeholder pension of currently £179 week
 

trevskoda

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Mine was tranferred to a private ins co which i can make no sense of whatsoever.
 

TeamRienza

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Each year at about £880 (it varied in the past) will generate about £4 per week, so £4 x52= £208. You will be ahead of the game in just over 4 years.

Davy
 

TeamRienza

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THIS ARTICLE COULD SAVE SOME OF YOU THOUSANDS OF POUNDS.

For those of you who have retired early, but do not have a full contributions record, look at this, if you have grandchildren for whom you care for on occasions. You can even look after them at a distance by phone or video call.


This is the way of filling back years at no cost to you. As quoted in an earlier post my brother in law used it successfully recently. He is now attempting to get refunds on bought years before I made him aware of this scheme. I will update this post when he gets a reply. We will become grandparents in June but I don’t think a child in Sydney would qualify!

Davy
 
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oppy

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When, for health reasons, I had to stop working quite a few years ago in my early 60s the NI folks asked for just over £300 to update my pension thingies, so now in my mid 70s I get the grand total of £176 + a bit Which is far more than I need to survive
 

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