national insurance contributions on early retirement

I retired and about 50 and notified my local tax office. They gave me the choice of making or not making voluntary contributions, and advised me to get a pension forecast first. I got the forecast and decided not to contribute further.

No, you will only have to pay NICs if (despite being retired) you still work and earn more than the appropriate thresholds.

Even if you don't *have to* pay them, it may be worth your while paying Class 3 voluntary contributions, which will beef up your contribution record which will form the basis of the calculation of how much basic state pension, if any, you will be entitled to from age 65.

Class 3 currently costs £7.35 per week.

Off topic a bit, but:

My mother took early retirement over nine years ago, went onto the old age pension five years ago and recently got a letter asking if she wanted to pay her missing five years and she would get an extra 6 per week. There was an advice line so she phoned it. They told her- yes you have to pay the extra years contribution, but we can take it out of the amount we are due you- and we will send you a cheque for the balance. So she got a form, signed to say she wanted to pay and was willing for the outstanding contributions to come from the amount the DWP was then owe her and they sent her a cheque for several hundred pounds!!!

I remembered hearing about it on the wireless. People should have had letters offering the opportunity to pay voluntary contributions, but they didn't due to a computer error. So the government promised nobody would be disadvantaged. It certainly has meant a result for my mother- they even paid interest on the pension from the date it would have been due.

Neb

And assuming you are male you get a 'gimme' on the 5 years after you reach 60, if you are not working at the time. Unless the government screws us all yet again, it currently looks like a pretty good investment to pay voluntary contributions - unless you are far enough down on the breadline to be eligible for means tested versions.

You don't have to, but you may wish to pay some NI contributions if you want a full state retirement pension. You need to chalk up 44 "qualifying years" to get a full pension.

Step one is to get a "pension forecast" which will tell you how many more qualifying years you need for a full pension. You need to bear in mind that between the age of 60 and 65 you will be automatically credited with five years contributions, if you are unemployed, and provided you are not out of the country for (I think) more than 26 weeks in each year.

That is how it is at present but I read in the papers that Mr Blunkett, is talking about raising the retirement age to 67, so it is any ones guess how things will pan out in the future.

Ellis