Buying back missed NI years - UK

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Buying back missed NI years - UK (2023)

“Buying back missed years can be a good way to bolster retirement income as just one qualifying year of NI at the standard rate of £824.20 adds up to £275 per year (1/35 of the full rate of the state pension) to your pre-tax state pension – putting the breakeven point of making those contributions at three years after you start claiming your state pension,” says Alice Haine, personal finance analyst at Bestinvest. 

You’ll make the money back as long as you get your pension for three years. Anything after that would be profit, making it a worthwhile investment as this £824.20 outlay would amount to £5,500 over a typical 20-year retirement. 

If you purchase back five years of NI for £4,121, that will boost your retirement pot by £27,500 - a staggering return on investment of nearly 600%. 

That’s a pretty good return on the initial investment, especially if you’ve got the extra cash and were thinking of investing it in something else. 

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