National Insurance
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- Lemon Pip
- Posts: 75
- Joined: November 6th, 2016, 8:42 am
National Insurance
Hi,
I have just checked my national insurance record and I have 37 qualifying years however it also says I need one more year to get the full pension.
I may be made redundant shortly, I presume I won’t lose the weeks of this tax year I have already paid but would need to pay class 3 NI for the remainder of this tax year? Note I have no intention of getting another job so will be effectively early retired at age 55.
I have just checked my national insurance record and I have 37 qualifying years however it also says I need one more year to get the full pension.
I may be made redundant shortly, I presume I won’t lose the weeks of this tax year I have already paid but would need to pay class 3 NI for the remainder of this tax year? Note I have no intention of getting another job so will be effectively early retired at age 55.
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- Lemon Half
- Posts: 7479
- Joined: November 4th, 2016, 6:11 pm
Re: National Insurance
I'm sure someone will come along with the actual figures, but if you've paid NI this year already on salary of X (where my memory tells me X is fairly low, £8K or £12K or something) then this year will count as a full year and you won't need to pay any more.
Scott.
Scott.
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- Lemon Slice
- Posts: 755
- Joined: November 4th, 2016, 4:27 pm
Re: National Insurance
NI Pension Credits is an utter nightmare when you're trying to find out what is and isn't eligible.
Pension Credits are awarded per week, and you get one if you earn over £120 in the week, or are treated as such.
Which means what matters is the time period over which your salary is treated as covering. If you are paid monthly and earn over £520 for the month then you get a credit for all the complete weeks in that month.
You have to have the full 52 weeks for the year to be a qualifying year for the state pension, which can be topped up with class 3 voluntary contributions.
Pension Credits are awarded per week, and you get one if you earn over £120 in the week, or are treated as such.
Which means what matters is the time period over which your salary is treated as covering. If you are paid monthly and earn over £520 for the month then you get a credit for all the complete weeks in that month.
You have to have the full 52 weeks for the year to be a qualifying year for the state pension, which can be topped up with class 3 voluntary contributions.
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- Lemon Half
- Posts: 7479
- Joined: November 4th, 2016, 6:11 pm
Re: National Insurance
So my recollection, from the dim past when I needed to care about it, is that that's not the case. That if you earned over a certain amount and paid NI on it then it counted as a qualifying year even if you didn't work 52 weeks.NeilW wrote:You have to have the full 52 weeks for the year to be a qualifying year for the state pension
But obviously my memory may be faulty, do you have a reference?
Scott.
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- Lemon Half
- Posts: 7479
- Joined: November 4th, 2016, 6:11 pm
Re: National Insurance
Ah good, I seem to be remembering correctly.
* This is £118 x 52 = £6136.
Scott.
https://www.thisismoney.co.uk/money/pen ... d-out.htmlFor a year of your working life to be a ‘qualifying year’ towards your state pension, you have to have paid (or been credited) with NI contributions on earnings equal to 52 times the weekly lower earnings limit*.
...
To give a simple example, suppose that you have a year in which you do no paid work for 26 weeks and then you do 26 weeks at an earnings level of £236 – double the lower earnings limit.
For the year as a whole, you have qualifying earnings of 52 times the LEL and this is therefore a qualifying year.
* This is £118 x 52 = £6136.
Scott.
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- Lemon Slice
- Posts: 755
- Joined: November 4th, 2016, 4:27 pm
Re: National Insurance
"From 6th April 2010 a qualifying year is any year in which your earnings factor is equal to or more than the Lower Earnings Level for that year"swill453 wrote:So my recollection, from the dim past when I needed to care about it, is that that's not the case. That if you earned over a certain amount and paid NI on it then it counted as a qualifying year even if you didn't work 52 weeks.NeilW wrote:You have to have the full 52 weeks for the year to be a qualifying year for the state pension
But obviously my memory may be faulty, do you have a reference?
Earnings factor is defined in sections 22 and 23 of the legislation https://www.legislation.gov.uk/ukpga/19 ... 320_en.pdf
Once you get through that Byzantine mess you are treated as having a credit for the week
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- Lemon Slice
- Posts: 755
- Joined: November 4th, 2016, 4:27 pm
Re: National Insurance
It's £120 for 2020/21. So the LEL is £6240.swill453 wrote: * This is £118 x 52 = £6136.
Scott.
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- Lemon Half
- Posts: 7479
- Joined: November 4th, 2016, 6:11 pm
Re: National Insurance
Ok, so if the OP has paid NI on more than this amount this tax year so far, then it counts as a qualifying year. No need to worry about the rest of the 52 weeks.NeilW wrote:It's £120 for 2020/21. So the LEL is £6240.swill453 wrote: * This is £118 x 52 = £6136.
Scott.
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- Lemon Half
- Posts: 6209
- Joined: November 4th, 2016, 11:24 am
Re: National Insurance
smokey01 wrote:I may be made redundant shortly, I presume I won’t lose the weeks of this tax year I have already paid but would need to pay class 3 NI for the remainder of this tax year? Note I have no intention of getting another job so will be effectively early retired at age 55.
swill453 is correct in that the 52 weeks worth is a lower earnings limit £ amount not a calendar period, but the figure he gives is last years.swill453 wrote:* This is £118 x 52 = £6136.
For 2020/21 it's £120 * 52 = £6,240. https://www.gov.uk/guidance/rates-and-t ... thresholds
So, as long as you've already earned more than £6,240 this tax year (and paid class 1 NICs on it) then this year will already be a qualifying year.
Either way, as class 3 NICs are frozen in price for 2 years after the end of the tax year, I suggest you simply do nothing for now and just check your NI record again in a years time (well after April 2021), and if then it shows a shortfall you can make it up then.
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- Lemon Slice
- Posts: 755
- Joined: November 4th, 2016, 4:27 pm
Re: National Insurance
Do you know how it works with multiple jobs where you're up and down below the LEL in payment periods interspersed with fortnightly National Insurance Credits from the Job Centre?mc2fool wrote: So, as long as you've already earned more than £6,240 this tax year (and paid class 1 NICs on it) then this year will already be a qualifying year.
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- Lemon Half
- Posts: 6209
- Joined: November 4th, 2016, 11:24 am
Re: National Insurance
"If an individual has earnings in any particular job less than the Lower Earnings Limit (LEL) (£109 per week in 2013/14) they do not pay any National Insurance, and will not accrue a qualifying year towards the basic State Pension. Those who earn less than the LEL in two or more jobs are not liable to pay NI contributions and similarly do not accrue a qualifying year towards the State Pension even if, when combined, their earnings are above the LEL. In other words, earnings from separate jobs cannot be aggregated for pension purposes."NeilW wrote:Do you know how it works with multiple jobs where you're up and down below the LEL in payment periods interspersed with fortnightly National Insurance Credits from the Job Centre?mc2fool wrote: So, as long as you've already earned more than £6,240 this tax year (and paid class 1 NICs on it) then this year will already be a qualifying year.
https://www.gov.uk/government/statistic ... tiple-jobs
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- Lemon Pip
- Posts: 75
- Joined: November 6th, 2016, 8:42 am
Re: National Insurance
Thanks, I’ve earned more than £6,240 this tax year so it looks like I will be ok but I will double check after April 2021.
Thanks everyone
Thanks everyone