Class 3 Contributions

Oct 11, 2008 3 Replies

My wife has carried out an on-line State Pension Forecast - she is 60 next September



It says that she has 24 qualifying years giving 86% of the Basic Pension.



She discussed with Pension Service to see if she could pay Class 3 to make up short fall



They said she could pay £170 Class 3 for 07/08 which would increase the amount of the pension - and then she will be able to pay Class 3 for 08/09 next July.



Fine we thought and sent of cheque to HMRC for the £170 - this has not been included in figures yet - only sent off yesterday.



However, I have just done a what-if? on Pension Forecast and assumed that she got a job and earned £50,000 from now until retirement age (no chance!!!) - but the response was that this would NOT up her Pension from the 86%. Why would that not make up/contribute to the shortfall?


Do these online things work? I know HMRC's are useless.

So she has 11 years HRP presumably?

What about earlier years? You can go back 6 tax years, so if any of the last 6 years aren't qualifying years or HRP years then she could make contributions for

4 of them to secure a 100% basic state pension.

Also due to an IR c*ck-up with sending warning letters or something there are some circumstances in which you can pay class 3 for even earlier years, see:

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Assuming she started a 50k job now, it would give her an extra year for this tax year, ie she wouldn't need to pay class 3. But IIRC next tax year (ie the year she reaches state pension age) won't count.

Spot on

Many thanks - makes sense

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