We had this decision to make a few months ago. It’s not quite as simple as it seems.
Mrs BigJohn is one of those WISPI women – whose retirement age got put up from 60 to 66 and she left full time employment at age 61.
We couldn’t get any sense out of the NI website – it said she had about 40+ years of full contributions but there was still a shortfall. We phoned the Pensions Helpline and they couldn’t have been more helpful. They made everything clear, told us which years we should top up, how much it would cost for each year and how much extra pension this would result in. It was quite a big amount so we took a day or two to decide. Yes, the answer was if she lived 5 years after her pension started she would be in profit.
When we called back to say go ahead the guy on the phone said “hang on, has she got any self-employed or property income?” Well, yes, we rent out a couple of houses.
It turns out that the voluntary contributions for self employed/property income are much (much) lower than for the standard ones but their effect on the pension is the same. What’s more, in the first tax year we only had about 1 month of qualifying income, so only 4 weeks of NI but it still counted to the full uplift.
So, make sure that she gets self-assessment tax returns and make sure there’s a bit of turnover to qualify for NI contributions and get on the phone to the Pension Helpline. You won’t believe how helpful they are.