N.I Contributions

Merlin5

Merlin5

Merlin5

Soldato
Joined
17 Aug 2009
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Finchley, London
This is obviously something I need to speak to my accountant about but meanwhile I thought I'd run it by you educated chaps. I'm slightly confused about how many more years I need to pay N.I for the full state pension which is currently £159.55.

It's just occurred to me that I've neglected some national insurance contributions. Since I became fully self employed a few years ago it seems I have quite a shortfall. Oops.

My national insurance record however shows I've so far got 28 years of full contributions paid. That's good.

I think 35 years qualifies for a full state pension and my pension comes of age in May 2025 where I officially become an old git. So it would seem that I need to pay 7 more years of contributions to qualify for the full state pension. As things stand, I'd get a pension but obviously a bit less per week.

I've just checked my N.I contributions record online at gov.uk. On my record it says '8 years to contribute before April 2025'. That's from 2017 to 2025. Why would I need to pay 8 years of N.I though? That would be 36 years contributions, more than the required amount of total years to qualify for the full pension.
Also, the record shows I have 10 years between 2006 and 2017 where I didn't make full contributions and that I can make voluntary contributions by April 2023 if I want to make up that shortfall. It amounts to about £5,500.

But assuming I make 7 years worth of full contributions between now and 2025, wouldn't that mean that I don't need to make up the arrears? Or if I did pay the arrears, presumably I'd only need to pay 7 of the 10 years to qualify for my pension and then I assume I'd not need to make any further new contributions between now and 2025?

I've seen my state pension summary page. It says 'Estimate based on my contributions up to 5th April 2017 is £139.90 a week', (obviously not including inflation by 2025).

But to confuse me further, under that it says 'Forecast if you contribute another 5 years before 5th April 2025 is £159.55'. Under that it says '£159.55 is the most you can get. You cannot improve your forecast any further, unless you choose to put off claiming".

So, 28 years that I already have, plus 5 years = 33 years. Huh? So is it not 35 years for full state pension?
 
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platinum87 said:
It says "If you’re employed, you stop paying Class 1 National Insurance when you reach the State Pension age."

On this link

https://www.gov.uk/national-insurance

There is no mention of how long you need to contribute for, so i assume it is when you hit the state pension age.
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you dont have to contribute all your working life, if you stopped working at 50 as long as you have worked the minimum amount of time you will still get the full amount, mine says i am 2 years short for the full amount 28 years of work
 
I'm confused how you've not paid NI since becoming Self employed?? When you do you tax return, it automatically adds your NI into your calculation so how has that been missed??

If you're self-employed, you pay Class 2 contributions at a flat weekly rate and Class 4 contributions annually as a percentage of your taxable profits. (both via your tax return)

You will continue to pay NI up until State pension age whether you have a full pension already in place or not.
 
New pension contributors need 35 years, that is correct.
If you make up you years between now and retirement, as you have suggested the 7 years to bring your 28 up to 35 then yes, you will receive a full state pension at your statutory retirement age.

There make be lower amounts of years for older people who are closer to retirement, this might be while you are told 30 years challengedavid.


You continue to make Ni contributions when you fulfil the Ni criteria up until you reach stat retirement age.
Even if you have made 35 years of contributions, you continue to make contributions if you are earning sufficiently even if you have 35 years of contributions.
The government doesn't let you off with it, and why Ni is basically just another tax upon the workers, rather than any actual pension scheme.
 
I retired this year with 47 years of NI contributions (18 to 65). Some of that was as 'contracted out' for a company pension scheme, but I must have paid the necessary minimums as I get the £159 and change as a state pension amount.
 
have they changed the late-paid rules? you say you can pay the conts from 2006, they're way past the 6 year limit they had when i worked in Class 2 Group.
 
If you think your missing a few years conts just pay some voluntary class 3 conts - works out about 720 for each year.
 
SexyGreyFox said:
I think it's unfair that I paid full stamp quite a few years ago but I still have to pay until I retire.
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Yes well they will claim that it pays for all the nhs claims and nhs treatment that you know so well about.
I think the libdem plan of ringfenced actual tax contri with proper statement of jse of purchase for social care and nhs, with the removal of ni entirely, and replaced by bolstering the contris made to workplace pensions would be the way forward, but it’ll never happen.

The hilarity that ni pays for nhs plus state pension is quite mad, and none of them are prepred to admit it.
Those who claim the most in each case tend to contribute the least.
 
Destination said:
Yes well they will claim that it pays for all the nhs claims and nhs treatment that you know so well about.
I think the libdem plan of ringfenced actual tax contri with proper statement of jse of purchase for social care and nhs, with the removal of ni entirely, and replaced by bolstering the contris made to workplace pensions would be the way forward, but it’ll never happen.

The hilarity that ni pays for nhs plus state pension is quite mad, and none of them are prepred to admit it.
Those who claim the most in each case tend to contribute the least.
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Who’s claiming that NI payments cover the cost of the NHS? Very little of NI payments go towards healthcare - the majority goes towards the State Pension and a number of other social benefits.
 
If you log into your online HMRC account, it will show you all historical NI contributions by year, any underpayments and the number of years until you're paid up.
 
SexyGreyFox said:
It is surprising how many people think that NI = NHS, probably the same amount who think Vehicle (Road) Tax = road maintenance.
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Yes I suppose so, especially when the government partially tells us.

The National Insurance Funds are used to pay for certain types of welfare expenditure and National Insurance payments cannot be used directly to fund general government spending. However, any surplus in the funds is invested in government securities, and so is effectively lent to the government at low rates of interest. National Insurance contributions are paid into the various National Insurance Funds after deduction of monies specifically allocated to the National Health Services (NHS). However a small percentage is transferred from the funds to the NHS from certain of the smaller sub-classes. Thus the four NHS organisations are partially funded from NI contributions but not from the NI Fund.https://en.wikipedia.org/wiki/National_Insurance#cite_note-7
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https://en.wikipedia.org/wiki/National_Insurance#cite_note-7

It matters not as the moment anyway, as contributions don't cover expenditure, and in our aging society where our NHS prolongs the lifespan of those who do not contribute, no matter their morbidity, the gap will seek to widen.
I think workplace (forced contribution) pensions are a long term solution to such issues as eventually they do some form of mean testing of state pension benefits, and modulate it with regards any personal pension/workplace pension one had.
 
SexyGreyFox said:
You never stop paying up until you retire or die.
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I don't understand. Surely once you've paid the required number of years to qualify for a full pension, 30 or 35 years, you wouldn't need to keep paying? My N.I record shows it's voluntary contributions, not compulsory.
 
Merlin5 said:
I don't understand. Surely once you've paid the required number of years to qualify for a full pension, 30 or 35 years, you wouldn't need to keep paying? My N.I record shows it's voluntary contributions, not compulsory.
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No, national insurance is just a form of income tax, you pay national insurance until you are retirement age regardless of how many years you've paid in.
 
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