Is It worth Paying NI Top-up?

[LuckyLucas]

Hi All

 

I did the online NI contribution/Pension Top-up Assessment

 

It said I need to pay from 2008 to now if I want the 180 pounds a week figure it gave me - the sum from 2008-2024 is 12k pounds (probably nearer 10 as I'll be tier 3 for all that time (teaching here since then))

 

I know I will need to continue to pay until retirement age (another 13 years) if I top up.

 

My question is: If I pay from 2008 to 2038 (about 20-25k i think), I can get my 180 pounds a week equivalent when I retire while staying in Thailand or not?

 

Thanks to anyone who can shed light.

 

LL

 

I should add that ostensibly it seems that I'd get my 20-25k back after a couple of years so it seems a deal too good to be true if I want to draw a UK gov pension in Thailand

 

[lamyai3]

Well worth the investment. The cost of funding a full state pension is around a quarter of a million pounds on current annuity rates. Any NIC's paid in are recouped within around 3 years after pension age.

 

On the downside the pension is frozen if living in Thailand, and pension reforms (means testing etc) may happen in the coming years. 

[BritManToo]

Ni payment after 2016 get you 4.75/week extra. Usually payments before 2016 get you nothing.

 

But that's betting there will still be a state pension in 2038 available to expats.

[hotandsticky]

14 minutes ago, lamyai3 said:

Well worth the investment. The cost of funding a full state pension is around a quarter of a million pounds on current annuity rates. Any NIC's paid in are recouped within around 3 years after pension age.

 

On the downside the pension is frozen if living in Thailand, and pension reforms (means testing etc) may happen in the coming years. 

 

 

Means testing and residency requirements are the two big risks

[chickenslegs]

51 minutes ago, LuckyLucas said:

the sum from 2008-2024 is 12k pounds (probably nearer 10 as I'll be tier 3 for all that time (teaching here since then)

If you have been working in Thailand you may be able to pay Class 2 voluntary contributions. So you will pay a lot less. It's great value. Class 2 would be around 180GBP per year, compared to around 800GBP for Class 3.

 

I think you should phone the International DWP office to get better information. Sometimes extra payments do not get you extra pension.

[lanng khao]

58 minutes ago, LuckyLucas said:

Hi All

 

I did the online NI contribution/Pension Top-up Assessment

 

It said I need to pay from 2008 to now if I want the 180 pounds a week figure it gave me - the sum from 2008-2024 is 12k pounds (probably nearer 10 as I'll be tier 3 for all that time (teaching here since then))

 

I know I will need to continue to pay until retirement age (another 13 years) if I top up.

 

My question is: If I pay from 2008 to 2038 (about 20-25k i think), I can get my 180 pounds a week equivalent when I retire while staying in Thailand or not?

 

Thanks to anyone who can shed light.

 

LL

 

I should add that ostensibly it seems that I'd get my 20-25k back after a couple of years so it seems a deal too good to be true if I want to draw a UK gov pension in Thailand

 

I wouldn't bother, there will be nothing left in the pot by the time you retire..

[ElwoodP]

You will not try to bypass the swearing filter, if you want to keep your posting rights.

Civil and polite in all posts please!

[The Cyclist]

1 hour ago, LuckyLucas said:

Thanks to anyone who can shed light.

 

Listen to @hotandsticky

 

31 minutes ago, hotandsticky said:

 

 

Means testing and residency requirements are the two big risks

 

I believe this is why the State Pension was moved over to a " Benefit " in 2016 ?
 

Easier to make it ' Means Tested ' at some point in the future, I also think that ' Future ' will be sometime during this Parliament, if the UK stays on the current trajectory.

 

I haven't heard any whispers about Residency requirements, but that also makes sense.

 

I have heard whispers about the potential to offer people, not yet receiving the State Pension, a lump sum payment to waive the State Pension, when they make a claim. A figure IRO of £80k was mentioned.

 

Not saying it is all true, or will happen. But I think it is clear to most that the State Pension cannot continue, under the current model.

[sometimewoodworker]

1 hour ago, LuckyLucas said:

Hi All

 

I did the online NI contribution/Pension Top-up Assessment

 

It said I need to pay from 2008 to now if I want the 180 pounds a week figure it gave me - the sum from 2008-2024 is 12k pounds (probably nearer 10 as I'll be tier 3 for all that time (teaching here since then))

 

I know I will need to continue to pay until retirement age (another 13 years) if I top up.

 

My question is: If I pay from 2008 to 2038 (about 20-25k i think), I can get my 180 pounds a week equivalent when I retire while staying in Thailand or not?

 

Thanks to anyone who can shed light.

 

LL

 

I should add that ostensibly it seems that I'd get my 20-25k back after a couple of years so it seems a deal too good to be true if I want to draw a UK gov pension in Thailand

 

The state pension is an incredibly generous (for the amount you pay and get) investment 

usually you break even with 4 years of pension.

Quote

You can usually pay voluntary contributions for the past 6 years. The deadline is 5 April each year.

Is the general guidance  from gov.uk

However you maybe able to top up previous years that are incomplete DWP will be able to advise.

You need 35 years of contributions to get a full pension.

you haven’t mentioned how many years you currently have but from the information in your post it is only 5! Is that correct?

 

you should get a written statement from the pensions office, that will give you your exact position and the years that you can top up or pay in full. The online statement is only an approximate one and you need the written one to be sure

 

despite the naysayers you would be incredibly badly advised not to make sure you have 35 years of contributions before you retire.

 

I was able to pay incomplete and missing years, I have already got back 2½ times the amount I paid

[sometimewoodworker]

13 minutes ago, The Cyclist said:

I have heard whispers about the potential to offer people, not yet receiving the State Pension, a lump sum payment to waive the State Pension, when they make a claim. A figure IRO of £80k was mentioned.

For the majority of recipients a lump some equal to about 9 years is probably a bad deal

[hotandsticky]

20 minutes ago, The Cyclist said:

 

Listen to @hotandsticky

 

 

I think it is clear to most that the State Pension cannot continue, under the current model.

 

 

...which is ironic given that it considered one of the worse in Europe 

[The Cyclist]

7 minutes ago, sometimewoodworker said:

For the majority of recipients a lump some equal to about 9 years is probably a bad deal

 

Is it really a bad deal if they raise the age to 70 ( being discussed ) and you are on a frozen pension ?
 

It would be a bad deal if the only Pension you had was the State Pension, and I am not convinced that their is a significant amount of Brits, full time in Thialand, living on only the State Pension.

[The Cyclist]

22 minutes ago, hotandsticky said:

 

 

...which is ironic given that it considered one of the worse in Europe 

 

Cant agree with that.

 

Just like the NHS model,  I don't  think any other ( Major ) European Country follows the UK's State Pension models.

 

So difficult, if not impossible to make a direct comparison.

[hotandsticky]

3 hours ago, The Cyclist said:

 

Cant agree with that.

 

Just like the NHS model,  I don't  think any other ( Major ) European Country follows the UK's State Pension models.

 

So difficult, if not impossible to make a direct comparison.

 

It is unfortunately a fact.

 

 

15th  (up from 16th whoop, whoop)

 

 

https://www.almondfinancial.co.uk/pension-breakeven-index-how-does-the-uk-state-pension-compare-to-the-rest-of-europe.

 

 

I agree with your comment about only having the state pension. I have met a few Brits in that situation and it is obviously a struggle, even in Thailand. One guy received 8,500 Baht pm ! (when the rate was 50+).

 

He earned good money labouring in road construction but what should have been his NICs finished up behind the bar of the Rose & Crown.

[The Cyclist]

1 minute ago, hotandsticky said:

It is unfortunately a fact.

 

 

15th  (up from 16th whoop, whoop)

 

Yes, I'm not disagreeing that is how it is painted. I do disagree that it is a fair comparison. Just like trying to compare the NHS with France, Germany or Holland. Totally different funding model.

 

13 minutes ago, hotandsticky said:

agree with your comment about only having the state pension. I have met a few Brits in that situation and it is obviously a struggle, even in Thailand. One guy received 8,500 Baht pm ! (when the rate was 50+).

 

He earned good money labouring in road construction but what should have been his NICs finished up behind the bar of the Rose & Crown.

 

All I can say, is thankfully that will never be me, and whatever I end up getting as a State Pension is nothing more than a bonus and some extra spending money.

[sometimewoodworker]

6 hours ago, The Cyclist said:

 

Is it really a bad deal if they raise the age to 70 ( being discussed ) and you are on a frozen pension ?
 

It would be a bad deal if the only Pension you had was the State Pension, and I am not convinced that their is a significant amount of Brits, full time in Thialand, living on only the State Pension.

It rather depends on when the option to take a lump sum arrives.

It is extremely likely to be at the point you can claim the pension. Thus at that point you don’t have a pension far less a frozen one. If that option were available from April this year it represents just over six and a half years of pension payments. Given that the U.K. life expectancy is a bit over 82 years you would be throwing away about £100k, (if the pension age were 70) much more than that if you exceed the average lifespan by a number of years and it will take quite a few years to raise the pension age to 70.

 

It is irrelevant if you have other income you will be loosing over ฿500,000 per year. I don’t know anyone who has the slightest grasp of math, however much income they may have, who would think that doing that is a good idea. Also if they are independently wealthy then the £80k will be insignificant and they certainly didn’t become independently wealthy by having no math ability or being unable to employ those who are not mathematically challenged.

 

The only people for whom it could make sense are those who are virtually certain that they will die in less than 6 years from being able to claim their pension 

[The Cyclist]

6 minutes ago, sometimewoodworker said:

It rather depends on when the option to take a lump sum arrives.

It is extremely likely to be at the point you can claim the pension

 

Yes, that is what I said. When you start the ball rolling to start the State Pension.

 

7 minutes ago, sometimewoodworker said:

It is irrelevant if you have other income you will be loosing over ฿500,000 per year. I don’t know anyone who has the slightest grasp of math, however much income they may have, who would think that doing that is a good idea. 

 

Losing Baht 500,000 a year, top line perhaps, deduct additional tax, a State Pension today takes me into the 40% tax bracket. When I could potentially gain a tax free lump sum.

 

11 minutes ago, sometimewoodworker said:

The only people for whom it could make sense are those who are virtually certain that they will die in less than 6 years from being able to claim their pension 

 

And there is the issue. Take a lump sum and enjoy it, or take an annual pension and potentially only see it for 2 or 3 years.

 

Again, just to reiterate. Not a good move for someone who only has a State Pension.It is worth considering, should it come to pass, for those that the State Pension is nothing more than a bonus.

[sometimewoodworker]

2 minutes ago, The Cyclist said:

And there is the issue. Take a lump sum and enjoy it, or take an annual pension and potentially only see it for 2 or 3 years.

People generally have a reasonable idea of their health, while I certainly can’t predict the future I ams planning projects and activities for quite a number of years and have been a pensioner for coming up on a decade.

 

I can’t predict my life expectancy but barring accidents and medical issues I will probably have 2+ decades of pension before starring at the local temple 

[The Cyclist]

3 minutes ago, sometimewoodworker said:

People generally have a reasonable idea of their health, while I certainly can’t predict the future I ams planning projects and activities for quite a number of years and have been a pensioner for coming up on a decade.

 

I can’t predict my life expectancy but barring accidents and medical issues I will probably have 2+ decades of pension before starring at the local temple 

 

Sure, I try my hardest to stay off Thai roads after dark O'Clock, but it guarantees nothing.

 

We can all hope for the best health wise, and continue to plan ahead, that doesn't mean that life can 't or wont kick us in the nuts at any time.

[Paul Halstead]

Applying for class 3 NI contributions you need to fill in a 22 page online application on GOV UK website.Any years before 2016 will not be allowed I believe the cut off time for applying is end of  March or April 2025.It is done on an individual basis and your circumstances.Having been declined .I applied for 2years  class 2 contributiond approx.1600 pounds and a reply to my address in England said I qualified for class 3 NI  contributions so am applying for 6years which cost about 1000pounds and gets me to 35 qualifying years. .Each year increases your pension by about 5pound a week...Be aware there is a long waiting time for a response.A long time ago DWP  did warn me that 1 year payment  would possibly only increase by about a pound a week instead of 5 pound so they should warn you if it is not worth paying any particular year. Hope that helps.

[Brick Top]

I backpaid 15 years to 2006 two years ago as i only had 17 full years , it cost me about £13,500.

They would only allow me to pay voluntary contributions back as far as 2006. It was a bit unfair as i had 3 years prior to 2006 were i had a couple of missing weeks

1982 : 49 weeks paid

1983 : 50 weeks paid

1984 : 48 weeks paid 

 

I wrote a couple of detailed letters to them explaining why those 3 years were missing a couple of weeks , and asked if i could pay the missing weeks but they wouldn't allow it.

So i only have 32 full years and cant therefore receive the full pension. I started receiving my pension in March 2024 , fours weeks in arrears at £202.00 per week. 

I estimate that the £13,500 i paid i would recoup in just ovef 3 years , so its like getting 33% interest on your money. 

 

[The Fat Controller]

A lot of confusion in various posts.

 

Only post-2016 years will normally increase entitlement for those that have not yet reached SPA, you need to ask that specific question as you CAN buy years that don't actually do anything, it's a minefield.

Each year you buy will currently increase your pension by £6.33/week

Whether you can pay Class 2 or 3 depends on where you were working and if self employed etc.

There is no "I need 35 years" for a full state pension UNLESS you started working AFTER 2016, which won't apply to anyone here!

Some may need around that but if you were in a contracted out company scheme you will need many more, I needed 48 years of NI to get the maximum.

There is also a deadline looming to pay older years.

Suggest this as a bit of light reading.

https://forums.moneysavingexpert.com/categories/state-pension-topping-up

[lanng khao]

7 minutes ago, Brick Top said:

I backpaid 15 years to 2006 two years ago as i only had 17 full years , it cost me about £13,500.

They would only allow me to pay voluntary contributions back as far as 2006. It was a bit unfair as i had 3 years prior to 2006 were i had a couple of missing weeks

1982 : 49 weeks paid

1983 : 50 weeks paid

1984 : 48 weeks paid 

 

I wrote a couple of detailed letters to them explaining why those 3 years were missing a couple of weeks , and asked if i could pay the missing weeks but they wouldn't allow it.

So i only have 32 full years and cant therefore receive the full pension. I started receiving my pension in March 2024 , fours weeks in arrears at £202.00 per week. 

I estimate that the £13,500 i paid i would recoup in just ovef 3 years , so its like getting 33% interest on your money. 

 

Well worth it, but the op doesn't get his pension till 2038, uk nore interested in paying 5 billion a year to house asylum seekers than taking care of there own pensioners , even scuppered the winter feul allowance , the way things are going anyone with saving will be forced to use them first before any benefit is paid. 

[Keeps]

I have just read a brief article which advised that after 5th April 2025 you will only be able to top up gaps in your NI contribution records for six previous tax years, rather than going back to 2006, as you can currently.

 

Need to get in quick if you plan on making top ups under the current rules. 

[lamyai3]

8 hours ago, The Fat Controller said:

Only post-2016 years will normally increase entitlement for those that have not yet reached SPA, you need to ask that specific question as you CAN buy years that don't actually do anything, it's a minefield.

 

This depends on how many years have been paid in. Looks like the OP has very few years accumulated, in which case those pre 2016 years would certainly count. It is as you say a bit of a minefield, and important to get specific information from the Future Pensions Centre on qualifying years for each individual case. 

[Bredbury Blue]

On 1/15/2025 at 12:36 PM, chickenslegs said:

If you have been working in Thailand you may be able to pay Class 2 voluntary contributions. So you will pay a lot less. It's great value. Class 2 would be around 180GBP per year, compared to around 800GBP for Class 3.

 

I think you should phone the International DWP office to get better information. Sometimes extra payments do not get you extra pension.

 

I checked online and it was a huge sum for unpaid years at class 3.

 

I'd been paying class 2 over the years I've been working here, so I wrote to them, not mentioning what it says online, and as i expected with working in Thailand, they wrote back quoting a very reasonable amount at class 2.

 

I would therefore recommend the OP writing (or calling) to get an assessment, as the website assessment seems to assess on the basis of working in the UK, and act quickly as there is a 5 April 2025 cut off date for backpaying some of the earlier years.

[sometimewoodworker]

On 1/16/2025 at 1:57 PM, The Fat Controller said:

Only post-2016 years will normally increase entitlement for those that have not yet reached SPA

Though I don’t know the meaning of SPA, I would be interested to know why exactly would paying for years between 2006 and 2016 (assuming that you would need some of those years to get the required number for a full pension) would not increase your entitlement.

 

On 1/16/2025 at 1:57 PM, The Fat Controller said:

There is no "I need 35 years" for a full state pension UNLESS you started working AFTER 2016, which won't apply to anyone here!

Again why do you say that. I certainly needed 35 years according to the DWP to qualify for a full pension and I can assure you I started working in the last century. This is of course a minimum and contracted out years will be excluded or extend the number required as in your case.

 

[Mutt Daeng]

SPA - State Pension Age?

[sammieuk1]

Don't forget to factor in tax at 20% if applicable on your extra income a reason I didn't bother paying in thousands when my card shows 35 years paid  🤔 

[topt]

On 1/17/2025 at 11:34 PM, sometimewoodworker said:

Though I don’t know the meaning of SPA, I would be interested to know why exactly would paying for years between 2006 and 2016 (assuming that you would need some of those years to get the required number for a full pension) would not increase your entitlement.

It all depends on what your situation was in 2016 when it all changed. How many years you had at that point which from memory decided under which system you would be paid at.

For example I had to pay for years after 2016 at the highest rate to get to the full "new" figure as I was contracted out but I could not (well I could have but would have made no difference) pay for some cheaper years at Class 2 or whatever rate as I had been working abroad prior to that.

 

There was a lot of negative press a couple or more years ago about people who paid out large sums only to be told they would not get any increase and This is Money Online (Daily Mail) ran a campaign to help people try and get refunds and to publicise the situation. 

it was discussed on here at the time.

 

Just found this - https://www.thisismoney.co.uk/money/pensions/article-10927867/How-state-pension-Steve-Webb-launches-site-help.html#m6575lcenuvj9mlzzp

Quote

Filling blanks for certain years - particularly those before 2016/17 - can sometimes have no impact on your state pension, particularly if you were contracted out and have already paid in 30 years by April 2016.