Another NI contribution question
#1
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Another NI contribution question
Just received a letter from HM advising that for the year 2008-2009 I can make up the missing NI contributions with just over £400 cheque.
I currently have 26 years contributions in.
Is it worth me doing so as I doubt there will be much of a basic state pension when I get there ? If they scrapped it would they only honour people who have full contributions ( I know....unanswerable )
If I don't does it mean I would get 26/30th of the full basic state pension anyway ?
Noting the amount to make up one year and assuming similar amounts for the other remaining 3 years, that would be about £1700 to get the full 30 years.....again is it worth it ?
Thoughts ?
I currently have 26 years contributions in.
Is it worth me doing so as I doubt there will be much of a basic state pension when I get there ? If they scrapped it would they only honour people who have full contributions ( I know....unanswerable )
If I don't does it mean I would get 26/30th of the full basic state pension anyway ?
Noting the amount to make up one year and assuming similar amounts for the other remaining 3 years, that would be about £1700 to get the full 30 years.....again is it worth it ?
Thoughts ?
#3
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Location: White Rock BC
Posts: 11,678
Re: Another NI contribution question
Noting the amount to make up one year and assuming similar amounts for the other remaining 3 years, that would be about £1700 to get the full 30 years.....again is it worth it ?
Thoughts ?
Thoughts ?
However, you also have to think about what else you could invest the £1,700 in and what other return it would give you, and compare.
#4
Joined: Jul 2005
Posts: 15,883
Re: Another NI contribution question
It depends on how long you are planning to live. If the basic state pension is £90 a week that £1,700 gets you 4/30ths or £12 a week. I.e. you get your money back in less than three years of retirement. That seems a good deal - especially if you are close (ish) to retirement now. If the £ strengthens against the $ between now and retirement then it will be a better deal.
However, you also have to think about what else you could invest the £1,700 in and what other return it would give you, and compare.
However, you also have to think about what else you could invest the £1,700 in and what other return it would give you, and compare.
If he pays nothing he gets 26/30ths. If he pays the £1,700 he gets the full amount. So instead of taking the full amount shouldn't you just take 4/30ths and calculate how it will take that amount to pay back the £1,700 investment. I figure roughly ten years.
#5
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Re: Another NI contribution question
But does he really get his money back in that short a time?
If he pays nothing he gets 26/30ths. If he pays the £1,700 he gets the full amount. So instead of taking the full amount shouldn't you just take 4/30ths and calculate how it will take that amount to pay back the £1,700 investment. I figure roughly ten years.
If he pays nothing he gets 26/30ths. If he pays the £1,700 he gets the full amount. So instead of taking the full amount shouldn't you just take 4/30ths and calculate how it will take that amount to pay back the £1,700 investment. I figure roughly ten years.
£12*52 = £624 a year. 624 x 2.725 years = £1,700.
Of course, the real return depends on a) how long the British government hold the money until you retire and b) how long you live after you retire.
Last edited by JonboyE; Oct 19th 2010 at 10:27 pm.
#6
Joined: Jul 2005
Posts: 15,883
Re: Another NI contribution question
Just did a quick look currently the full pension is £97.65 so it would pay back a little quicker.
Last edited by Steve_P; Oct 19th 2010 at 10:29 pm.
#7
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Re: Another NI contribution question
No worries.
#8
Re: Another NI contribution question
Last year I paid my missing 3 years contributions to qualify me for full pension (just over 300 GBP I think) The exchange rate made it seem like an even bigger bargain and I thought it was worth it considering they vastly reduced the amount of years required to qualify for full state pension
Gawd I feel old
Gawd I feel old
#9
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Re: Another NI contribution question
Last year I paid my missing 3 years contributions to qualify me for full pension (just over 300 GBP I think) The exchange rate made it seem like an even bigger bargain and I thought it was worth it considering they vastly reduced the amount of years required to qualify for full state pension
Gawd I feel old
Gawd I feel old
Of course, they may change the rules again by then and you'll be sitting pretty and I will lose out.
#10
Re: Another NI contribution question
I have 22 years of contributions so need another 8 to qualify for a full pension. If I wanted to be really mercenary about it I would wait till I am 63 and pay the maximum of six years arrears you are allowed, plus the final two years and qualify for the full pension. Between now and age 63 I get to keep the money for myself.
Of course, they may change the rules again by then and you'll be sitting pretty and I will lose out.
Of course, they may change the rules again by then and you'll be sitting pretty and I will lose out.
With the help of a very knowledgeable poster on the France forum, I discovered that even though I haven't contributed to NI for more than a couple of years in my life, the time spent in full time education after the age of 18 counts.
I will be eligible for the princely sum of 19 pounds a week, a life changing amount to be sure. But not so fast.... being in receipt of a UK state pension, no matter how paltry, allows me full access to the publicly funded health care system in France (where, as I may have mentioned, we plan to retire).
Last edited by Novocastrian; Oct 20th 2010 at 12:37 am. Reason: typo
#11
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Re: Another NI contribution question
Not directly relevant but perhaps useful to someone.
With the help of a very knowledgeable poster on the France forum, I discovered that even though I haven't contributed to NI for more than a couple of years in my life, the time spent in full time education after the age of 18 counts.
I will be eligible for the princely sum of 19 ponds a week, a life changing amount to be sure. But not so fast.... being in receipt of a UK state pension, no matter how paltry, allows me full access to the publicly funded health care system in France (where, as I may have mentioned, we plan to retire).
With the help of a very knowledgeable poster on the France forum, I discovered that even though I haven't contributed to NI for more than a couple of years in my life, the time spent in full time education after the age of 18 counts.
I will be eligible for the princely sum of 19 ponds a week, a life changing amount to be sure. But not so fast.... being in receipt of a UK state pension, no matter how paltry, allows me full access to the publicly funded health care system in France (where, as I may have mentioned, we plan to retire).
Enjoy when the time comes....
#13
Binned by Muderators
Joined: Jul 2007
Location: White Rock BC
Posts: 11,678
Re: Another NI contribution question
I will be eligible for the princely sum of 19 ponds a week, a life changing amount to be sure. But not so fast.... being in receipt of a UK state pension, no matter how paltry, allows me full access to the publicly funded health care system in France (where, as I may have mentioned, we plan to retire).
#14
Re: Another NI contribution question
Along the lines of "Oh, you live in Canada, do you know Jim Bollox?", where in france will he retire?
#15
Worth checking whether it will be Class II or Class III
Just received a letter from HM advising that for the year 2008-2009 I can make up the missing NI contributions with just over £400 cheque.
I currently have 26 years contributions in.
Is it worth me doing so as I doubt there will be much of a basic state pension when I get there ? If they scrapped it would they only honour people who have full contributions ( I know....unanswerable )
If I don't does it mean I would get 26/30th of the full basic state pension anyway ?
Noting the amount to make up one year and assuming similar amounts for the other remaining 3 years, that would be about £1700 to get the full 30 years.....again is it worth it ?
Thoughts ?
I currently have 26 years contributions in.
Is it worth me doing so as I doubt there will be much of a basic state pension when I get there ? If they scrapped it would they only honour people who have full contributions ( I know....unanswerable )
If I don't does it mean I would get 26/30th of the full basic state pension anyway ?
Noting the amount to make up one year and assuming similar amounts for the other remaining 3 years, that would be about £1700 to get the full 30 years.....again is it worth it ?
Thoughts ?