My state pension starts in January. Promoted by the letter notifying me of this I checked my pension forecast. Despite having 42 years of “full” contributions I found I was £20 per week short of my potential maximum pension due to my ex-employer opting out of the enhanced state pension schemes.
However it’s possible to close this gap by paying some more National Insurance now. The govt Future Pensions helpline told me that although I had five years worth of years I could make up, I need only pay four years worth to make up the £20 gap. In round terms I could pay £800 for each £5 of additional weekly pension. This is taxable but I would break even after about 4 years.
I then went into HMRC Voluntary NI Contribution helpline where they gave me the details to pay online from my bank account.
Both helplines were first class. This is in contrast to the impenetrable online advice from govt and my employer as to how the opt out is reflected in defined benefit pension schemes which had previously deterred me from looking into this.
I guess there will be a few members on here coming up to state retirement. Cases will differ and we need to avoid straying into financial advice so, as they say, “do your own research”.
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