Discussion
Any pension experts here? What is the criteria for being either class 2 or 3? As far as I know, if you are self employed, class 2. Employed class 3. BUT I have also found that IF you take early retirement then you have to pay the more expensive class 3?? Sounds weird. I am trying to find out what I need to top up and today have been handed around between the DWP and HMRC 5 times and despite filling out forms etc to find out WTF I need to pay....theres no record of anything anywhere......Computer age huh?
ruwokeenuff said:
Any pension experts here? What is the criteria for being either class 2 or 3? As far as I know, if you are self employed, class 2. Employed class 3. BUT I have also found that IF you take early retirement then you have to pay the more expensive class 3?? Sounds weird. I am trying to find out what I need to top up and today have been handed around between the DWP and HMRC 5 times and despite filling out forms etc to find out WTF I need to pay....theres no record of anything anywhere......Computer age huh?
if you take early retirement then you stop paying NI (Class 1 if you were an Employee, Class 2 and Class 4 if you were Self employed). However I think this means there might be a gap in your NI Contributions record which could then mean that you don't get a full State pension. You can ensure you get a full State pension by paying voluntary Class 3 .Countdown said:
ruwokeenuff said:
Any pension experts here? What is the criteria for being either class 2 or 3? As far as I know, if you are self employed, class 2. Employed class 3. BUT I have also found that IF you take early retirement then you have to pay the more expensive class 3?? Sounds weird. I am trying to find out what I need to top up and today have been handed around between the DWP and HMRC 5 times and despite filling out forms etc to find out WTF I need to pay....theres no record of anything anywhere......Computer age huh?
if you take early retirement then you stop paying NI (Class 1 if you were an Employee, Class 2 and Class 4 if you were Self employed). However I think this means there might be a gap in your NI Contributions record which could then mean that you don't get a full State pension. You can ensure you get a full State pension by paying voluntary Class 3 .ruwokeenuff said:
This is where it hits the fan. I stopped paying anything in 1999, as I went overseas....working self employed, paying USA taxes as well as UK ones on UK income. I cam back to the UK in 2011. I wasnt employed but wasnt retired as I carried on being self employed sort of. Theres a HUGE diff in class 2 to class 3 payments to top up the state pensh.....THATS the ongoing probs with HMRC/DWP etc
Apologies if I'm missing something.....If you've taken early retirement and want to buy back missing years then you have to pay Class 3. I don't think you can argue that you should pay Class 2 just because it's cheaper.
Countdown said:
ruwokeenuff said:
This is where it hits the fan. I stopped paying anything in 1999, as I went overseas....working self employed, paying USA taxes as well as UK ones on UK income. I cam back to the UK in 2011. I wasnt employed but wasnt retired as I carried on being self employed sort of. Theres a HUGE diff in class 2 to class 3 payments to top up the state pensh.....THATS the ongoing probs with HMRC/DWP etc
Apologies if I'm missing something.....If you've taken early retirement and want to buy back missing years then you have to pay Class 3. I don't think you can argue that you should pay Class 2 just because it's cheaper.
ruwokeenuff said:
Just trying to work out if I took early retirement....stopped working or was self employed...
If you were self employed you would have been registered with HMRC, completing self assessments each year, and paying the relevant tax and NI.If you were an Employee then obviously all of the above happened via PAYE.
It sounds like you were simply not working. My wife was in a similar situation (she was looking after the kids but (stupidly) the Child benefit was in my name. As a result she missed out on lots of NI credits). For her to "buy back" the missing years I believe it's £900 a year (which is broadly what Class 3 NI rates are).
If it helps then, as long as you live for at least 3 years you will have received the extrra that you have paid BACK in state pension.
Countdown said:
ruwokeenuff said:
Just trying to work out if I took early retirement....stopped working or was self employed...
If you were self employed you would have been registered with HMRC, completing self assessments each year, and paying the relevant tax and NI.If you were an Employee then obviously all of the above happened via PAYE.
It sounds like you were simply not working. My wife was in a similar situation (she was looking after the kids but (stupidly) the Child benefit was in my name. As a result she missed out on lots of NI credits). For her to "buy back" the missing years I believe it's £900 a year (which is broadly what Class 3 NI rates are).
If it helps then, as long as you live for at least 3 years you will have received the extrra that you have paid BACK in state pension.
Gassing Station | Finance | Top of Page | What's New | My Stuff