Voluntary national insurance contributions - good news or bad news?
The good news is that the law changed this month so that you may now be able to purchase an additional six years of state pension contributions by paying Class 3 contributions. Unfortunately, as a result of this new right, the rate of Class 3 contributions increased from £8.10 per week to £12.05 also from April 2009. The Pension Service website states that this is necessary to ensure that the change is cost neutral.
HMRC's website now includes clear guidance on the impact of paying additional contributions and who could benefit from the payments. The site also recommends that those considering doing so should check their state pension forecast through the Pension Service website.
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Cathy Corns is a Corporate Tax partner at Mercer & Hole.
