National Insurance Conts

[Balmus]

I have just realized that I have not paid any NIC’s for the last few years. I have had a look online but can’t seem to get any ware. I am not employed, not self-employed, don’t claim anything etc but make a living from punting. How do you guys in the same position pay your NIC’s? Any advice would be great. Cheers

[Crazyskier]

You can register as a 'sole trader' and pay a certain class (class 4?) of voluntary contributions. Recommended if you wish to draw a UK pension or apply for any benefits at any point.

CS

[weemac]

Start here https://www.access.tax.service.gov.uk/l ... gnin/creds by creating an account which will show you your lifetime payments and what they'll mean pension-wise. Then you can do lots of reading to find out what options you have.

I'm a few years' NIC payments short of the full state pension and I have several years to make up the difference should I choose to. It's a no-brainer really; the payments are pretty low and they'll guarantee full state pension, index-linked. If memory serves, I'll pay about £700 for each missing year of NIC payments. I think they're Class 3 contributions https://www.gov.uk/pay-voluntary-class- ... -insurance

[Emmson]

I'm in the same boat and have only 13 qualifying years, I got this sent in the summer when I made inquiries. The only thing I know for certain is you pay the oldest year you can 1st.

Sole trader and class 2, got no knowledge of that. maybe I should look into that.

[mickypaul72]

I finished work at 58 and although I have 40 odd qualifying years i still have to pay yearly contributions ( approx £700 ) until i reach state pension age which will be 66 in my case. To be exempt from paying you would have to get a job where your employer would pay. Pleading poverty does no good either because they would do a status check which would include checking your savings.

There's no such thing as a free lunch,

Regards,

Mick.

[PDC]

I'm in the same boat and have only 13 qualifying years, I got this sent in the summer when I made inquiries. The only thing I know for certain is you pay the oldest year you can 1st.

Sole trader and class 2, got no knowledge of that. maybe I should look into that.

It appears that in 2006-07 and 2008-09 you have made part contributions, for example you may have worked for 5 months of the year and been paying NI but as you did not pay enough NI to reach the threshold for a qualifying year those years do not count as qualifying years. However, you have the option of topping those years up and making them qualifying years.

The rest of the years you have not paid any NI and therefore would have to pay the full Class 3 contributions (Voluntary Contributions) to make them a qualifying year.

You say you have 13 qualifying years but you also need to know how many years you have until you reach state pension age (SPA). You need to make 35 years of contributions to get the full state pension, i.e. 35/35ths of the full state pension if you have 20 years come SPA you will get 20/35ths of the full state pension.

If you have less than 10 years you get nothing but you are past 10 already so that isn't an issue.

So lets say you have 20 years until reaching SPA you are going to fall short of the 35 years unless you make up some of your past missed years and pay Class 3 assuming you don't go back to work each year. However there is only a certain amount of time, 10 years, to make up past contributions, so in 20 years time you can't go back and buy back that 2006-2007 year. So you need to make the decision now if it is worth you buying back years now while you can and in particular it makes more sense to buy back the cheaper years.

If you have more than 35 qualifying years, say 40 you don't get a penny more than the person who has paid 35 qualifying years, you have effectively wasted your money buying the extra 5 years. Though if you are in work and liable to pay NI you can't opt out, you still have to pay it, so people who are in a 'normal' job all their life pay massively more NI than they really need to but have no choice about it. If you are trading though you have the choice of paying Class 3 or not.

You can make Class 2 and Class 4 contributions as a sole trade/self employed if that is actually what you are. If you are just trading and not a sole trader you can't pretend you are just so that you can pay Class 2 and 4 rather than Class 3 . That is fraud.

The goverment now have a very good website for checking your situation online at:

https://www.gov.uk/check-state-pension

Also this is a useful guide by Money Saving Expert that explains things very well including buying back previous years:

https://www.moneysavingexpert.com/savin ... -pensions/

I finished work at 58 and although I have 40 odd qualifying years i still have to pay yearly contributions ( approx £700 ) until i reach state pension age which will be 66 in my case. To be exempt from paying you would have to get a job where your employer would pay. Pleading poverty does no good either because they would do a status check which would include checking your savings.

There's no such thing as a free lunch,

That is incorrect, if you are unemployed and don't have earnings over the earnings thresholds e.g. from other pensions, rental income, savings interest etc you have no requirement to pay NI, no matter how many years of NI contributions you have made be it 1 year or 40 odd in your case.

When out of work you have the option to pay Class 3 Voluntary Contributions, the clue is in the name.

It isn't a free lunch as you only get what you have paid, so if you pay less than 10 years you get nothing, if you pay over 35 years you only get the same as someone paying 35 years and if you pay between 10 and 35 years eg 12 years you would get 12/35ths of the full state pension.

You can register as a 'sole trader' and pay a certain class (class 4?) of voluntary contributions. Recommended if you wish to draw a UK pension or apply for any benefits at any point.

This can only be done if that is actually the case, if you are not self employed/sole trader it would be fraud and you could be prosecuted.

All of my points refer to the New State Pension which is for Women born after 4 April 1953 and Men born after 4 April 1951. Prior to that you are in teh old state pension scheme where different rules may apply.

[Emmson]

Cheers!...good info above ^^^ they never told me how many qualifying years I needed for full pension but they did say 10 years to qualify to receive anything at all.