National Insurance increase to £12,570 - impact on pension
Discussion
So the news and law change now moving national insurance up to £12,570 mirroring the starting point of income tax.
This apparently removes 2 million from paying any National insurance - Yay some may think.
However for state pension you need qualifying years all 35 of them which means paying NI for each of those years, or if looking after a child up to 12yo or a few other examples.
But for those not in that exception list and who earn less than £12.570 and I not right in now flagging that those individuals unless they earn more will not gain qualifying years resulting in a lower state pension when retirement arrives?
This apparently removes 2 million from paying any National insurance - Yay some may think.
However for state pension you need qualifying years all 35 of them which means paying NI for each of those years, or if looking after a child up to 12yo or a few other examples.
But for those not in that exception list and who earn less than £12.570 and I not right in now flagging that those individuals unless they earn more will not gain qualifying years resulting in a lower state pension when retirement arrives?
Jasey_ said:
https://www.rights4seniors.net/content/qualifying-...
Apparently it's something called lower earnings limit that qualifies as a qualifying year.
Have to earn more that 6.5k or something like that.
Good question though and no doubt more complicated than the link explains
ThisApparently it's something called lower earnings limit that qualifies as a qualifying year.
Have to earn more that 6.5k or something like that.
Good question though and no doubt more complicated than the link explains
Gov link here https://www.gov.uk/new-state-pension/your-national...
worsy said:
It does say “you may get a qualifying year if you earn£”Why is it MAY / what could mean you don’t if you want between those values.
Welshbeef said:
worsy said:
It does say “you may get a qualifying year if you earn£”Why is it MAY / what could mean you don’t if you want between those values.
https://www.litrg.org.uk/tax-guides/students/going...
You need 52 weeks x lower earnings threshold or weeks where credit is made to meet the requirement.
My partner fell foul of this while working part time, and not earning enough to pay NI.
She is now having to make it up with voluntary contributions for those years, at a rate equivalent to a much higher salary.
It grates when people on benefits get a full NI credit with zero contribution, but working on a low wage you don't.
She is now having to make it up with voluntary contributions for those years, at a rate equivalent to a much higher salary.
It grates when people on benefits get a full NI credit with zero contribution, but working on a low wage you don't.
It’s worth giving careful thought to topping up vs putting the money in a sipp or Isa.
Depending on your age now it’s possible you’ll need to be 70+ to collect it with no guarantee on its value at the time.
At least with a sip you can get it 10 years before a state pension, at the moment.
Depending on your age now it’s possible you’ll need to be 70+ to collect it with no guarantee on its value at the time.
At least with a sip you can get it 10 years before a state pension, at the moment.
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