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Voluntary NICs

Discussion in 'Retirement' started by khib1, Aug 5, 2019.

  1. khib1

    khib1 New commenter

    I know this has been discussed before but has anybody actually paid for NICs for the gap years between taking their teacher's pension and getting their state pension and did it make any difference? Also has anyone paid the reduced NICs because they have done exam marking once retired? I've contacted the 'future pensions' department but not heard back yet. Just wondered if there was any anecdotal evidence.
  2. diddydave

    diddydave Occasional commenter

    I am in the process of doing just that and it's going to make quite a difference!

    I've been self-employed for years as I ran a small business at the same time as teaching, it never made enough to qualify to pay NI but it has meant that I've been filling in tax returns for years. This year, as I no longer teach and get my NI 'stamp' that way, I ticked the box to pay voluntary class 2 NI and I've had the bill but I've yet to see my NI record updated. I'm also an examiner so I could have done it that way but I'm not sure what the process would be.

    If I get another 6 years NI between now and when I'm 67 my state pension will rise by £24.55 a week. Given that the NI contribution is £3 a week (class 2) then for 6 years that's equivalent to me paying in £18 a week so I can see it's a fairly good investment.
  3. khib1

    khib1 New commenter

    That is really interesting and helpful. I am definitely going to pursue this. Do you have to pay them by a certain date? Can I pay for 'back' years? It all seems a bit too good to be true and they certainly don't make it simple do they.
  4. Piranha

    Piranha Star commenter

    Don't they? I found it easy enough. I use my little tutoring business, in which I aim to make £1,000 tax free every year, to pay class 2 contributions, although I could use exam marking if I didn't have that. See https://www.gov.uk/voluntary-national-insurance-contributions
  5. diddydave

    diddydave Occasional commenter

    You can pay for missing years within 6 years (I think) BUT...to pay the class 2 you have to be self-employed or fit other criteria that @Piranha has linked to, so unless you have already told hmrc that you have had this other income for those years you may not be allowed to pay that rate....class 3 is 5 times more expensive at £15 a week: https://www.gov.uk/voluntary-national-insurance-contributions/rates
  6. phatsals

    phatsals Established commenter

  7. khib1

    khib1 New commenter

    Thanks for the responses. I knew about fitting the criteria as I had read about examiners doing this. It just seemed a bit too good to true as I was aware that other voluntary NICs were a lot more expensive. As I have been examining and probably will continue to do so each year this was definitely an avenue of interest.
    Last edited: Aug 5, 2019
  8. applecrumblebumble

    applecrumblebumble Lead commenter

    I’m paying class 2 contributions right up to state retirement age best deal ever.
  9. diddydave

    diddydave Occasional commenter

    Is it worth noting that there is a 'maximum' number of years (35) that will be used to calculate the state pension? I only need another 6 to get the 'maximum' amount of state pension but have 13 years between now and state retirement age so there's no advantage, I think, to paying more than 6.

  10. applecrumblebumble

    applecrumblebumble Lead commenter

    I am well past 35 (47) but still not £168 and will not reach this at state retirement so I’m having to do this to maximise state retirement pension at 66. If, as you say diddydave with 13 years to go then by all means if 6 years give you the maximum state pension and the 35 years then no need to pay any more.
  11. diddydave

    diddydave Occasional commenter

    47...and not at the maximum...that's got to irritate!
  12. 60sunnysmile

    60sunnysmile New commenter

    I agree with diddydave on this. When I retire in three years, I will have 37 years of NI contributions, but I will only need one further year to make up to the full state pension. I plan to do invigilating and examining to ensure I only pay the £3 per week, but only for one year. I'll continue to work if I fancy doing it after that year, but my HMRC account shows that any extra years of paying NI (past the next 4) will make no difference as I cannot increase my state pension.

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