Morning all 
Yay.....it's Pasty Friday (we had fish & chips yesterday)
The pension law changed in 2016, and if you didn't pay the extra in NI after that date then your state pension is reduced.
I was in this situation - happily thinking I was going to get the maximum because I had 45 years of full contributions - until I delved deeper.
The Government website is slightly misleading, inasmuch as when you check your entitlement, you see the headline figure stating the maximum you could get. Below that is the amount you would actually get. To reach the maximum, you have to make up the NI shortfall for the years 2016 onwards. They will quote you a figure to pay for the 2016/17 year as well, but don't pay it - it'll just be lost money, as the law change came in halfway through the tax year and the IR only take full years into account. You only need to pay the extra for the tax years 2017/18 onwards.
I ended up paying approximately £750 for each year, which made a difference of approximately £5 a week on the state pension.
Not a lot by the sound of it, but if you think about that would be over £250 pa - effectively 33% return on capital. I worked it out that it would take just over 2.7 years to recoup my capital and after that I'll still be getting the 33% return.
As I said previously, it's a no brainer.
We shall sort out MrsDs NI shortfall towards the end next year.
We are in the fortunate position that both of our private pensions are bigger than our forecast state pensions (I get mine next week), everything is owned and paid for and we have a decent amount in the bank.
I sometimes wonder how some folk struggle by.
Yay.....it's Pasty Friday (we had fish & chips yesterday)
Have you already retired early and stopped paying NI?
The pension law changed in 2016, and if you didn't pay the extra in NI after that date then your state pension is reduced.
I was in this situation - happily thinking I was going to get the maximum because I had 45 years of full contributions - until I delved deeper.
The Government website is slightly misleading, inasmuch as when you check your entitlement, you see the headline figure stating the maximum you could get. Below that is the amount you would actually get. To reach the maximum, you have to make up the NI shortfall for the years 2016 onwards. They will quote you a figure to pay for the 2016/17 year as well, but don't pay it - it'll just be lost money, as the law change came in halfway through the tax year and the IR only take full years into account. You only need to pay the extra for the tax years 2017/18 onwards.
I ended up paying approximately £750 for each year, which made a difference of approximately £5 a week on the state pension.
Not a lot by the sound of it, but if you think about that would be over £250 pa - effectively 33% return on capital. I worked it out that it would take just over 2.7 years to recoup my capital and after that I'll still be getting the 33% return.
As I said previously, it's a no brainer.
We shall sort out MrsDs NI shortfall towards the end next year.
We are in the fortunate position that both of our private pensions are bigger than our forecast state pensions (I get mine next week), everything is owned and paid for and we have a decent amount in the bank.
I sometimes wonder how some folk struggle by.
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