Best option re buy back of years

[wigwam]

Hi, My wife has 12 qualifying years of NICs to 5/4/24.
She received back the NIC shortfall letter from the HMRC - she can buy back 18 years - however its all at class 3 (£824 per year = €14.4k in total).
So to get the max 35 years, it would be:
12yrs: existing qualifying years
18yrs: buy back years at class 3
5yrs: purchase class 2 (self employed) going fwd

My wife is now self employed in Ireland and can therefore pay at class 2 from 2024/25 onwards. She intends to work another 10 years self employed in Ireland.
My question is: as class 2 is cheaper, would it be better to only buy back 13 years (class 3) rather than 18 years i.e.
12yrs: existing qualifying years
13yrs: buy back years at class 3
10yrs: purchase class 2 (self employed) going fwd

This would save 5 years x (£824 - £179) = £3,225.

 

[Brendan Burgess]

Interesting calculation and looks correct, but I am not an expert.

You don't have to make that decision yet.

Buy back 13 years now because you can always go back 6 years anyway.
Then buy them back one at a time just in case your wife's plans change.

Brendan

 

[wigwam]

Thanks Brendan. The 18 buy back years have to be purchased by 5/4/25 according to the HMRC letter.

I think I'll buy back 13 years rather than 18 years (second option above)

 

[wigwam]

Does the UK state pension pass to your spouse upon death?

 

[DannyBoyD]

UK state pension pass to your spouse upon death

Not any more. System changed in 2016.