National Insurance

Denis_UK · 2 September 2005 at 11:14AM

I retired at 61 having paid 44 years NI a year later I returned to work, to my suprise I had no deductions for NI I was told I had paid 44years I was over 60 no more payments were required. I wonder if anybody working all their life for the same company have their NI contributions stopped when they reach 60. Does anyone know?

edda · 2 September 2005 at 11:32AM

Denis_UK

The rule is that employees do not have to pay NI contributions if they have reached the State Pension age - i.e. 60 for women, 65 for men (at the moment)

ManAtHome · 6 September 2005 at 11:56AM

On my pension forecast it states "Please note from the tax year in which you are 60 you will get automatic NI credits for 5 years if you meet certain conditions". I think this is related to how many qualifying years you have at the time - looks like you have the maximum, so are now getting 'cashback' (good on yer).

CIS · 6 September 2005 at 12:45PM

I used to work for State Pension Forecasing and may be able to help,

A man between 60 and 65 is liable for NI contributions as is any other employed earner.

NI only ceases to be payable when you are either un waged or low waged or over state pension age, the fact that you have 44 yrs of contributions does not make any difference, in theory NI can be paid for 49 yrs, age 16-age 65.

"You have to pay national insurance contributions while you are working and under pension age. You do not pay them if you are under 16, and you stop paying them when you are 60 (if you are a woman) or 65 (if you are a man). If you are a man between 60 and 65 and you are not working, you may be able to get national insurance credits (see under National insurance credits)."

Automatic credits have nothing to do with contribution history, each man receives them from 60-65, providing for each year he is not liable for class 2 NI or outside the country for more than 182 days in the tax year.
Each Automatic Credit gives 1 qualifying year, providing the year it is given for is not already a qualifying year (ie no doubling up).

Another point is that Automatic Credits do not accrue any State second Pension, this is only available to employed people paying or deemed to be paying Class 1 NI.

ManAtHome · 6 September 2005 at 1:27PM

Cheers CIS - do you know if 'low-waged' means less than NI threshold.?

Sure I read somewhere that SSP was now a better deal for people earning 'moderate incomes'. Presumably any extra years wouldn't affect Denis' basic pension, but could build up extra SSP depending on salary.

CIS · 6 September 2005 at 2:19PM

Low waged was my terminology, basically its any one earning below the point where NI is deemed to be paid, at present £82 per week.
Theyll earn through employment but no NI will be paid or deemed to be paid for them.

Your right, hes got 44 years so cant improve on the basic state pension but he could still accrue S2P if he had employed earnings.

Milarky · 17 September 2005 at 10:04AM

CIS wrote:

Low waged was my terminology, basically its any one earning below the point where NI is deemed to be paid, at present £82 per week.
Theyll earn through employment but no NI will be paid or deemed to be paid for them.

Your right, hes got 44 years so cant improve on the basic state pension but he could still accrue S2P if he had employed earnings.

..And to do this he (or anyone else in that position) should 'target' an income level from paid employment of not less than £82pw times 52 weeks - £4264pa.

You can also earn upto £94 in any week and still pay no National Insurance - which starts at 11% only above this figure. Doing this, you would 'qualify' a year after 46 weeks. But it is important that each week is 'qualifying' (even where no NI is payable) AND that all the weeks combined reach this magic figure of at least £4264. If you do miss this by even £1 you lose out entirely on any State Second pension for that year - about £60 annual pension

Denis_UK · 18 September 2005 at 4:29PM

Ref. my initial post I worked for 18 months P.A.Y.E on around £24000 per year I paid no NI during this period was I cheating the system?

CIS · 18 September 2005 at 11:45PM

Sounds like it. If your under pension age and working you have a liability to pay NI.

On £24000, this yr you would expect to pay (£24000 - £4888)= £19112 @ 11% = $2102

This gives about £3000 over 18 months.

I used to work for DWP and had access to the NIRS system used by IR to keep track of everyones NI record. This system has a series of calcualtions built in to it which flag figures that dont match, one of these gives a warning message next to any payments where the amount of NI paid does not match the amount the system expects.

I cannot say off hand that they do, but it is likely that at certain times these messages are looked at and accounts investigated.

It may be best if you contact your ex-employers to see whos advice they where acting on and if necessary you may need to come clean to HMRC, but you would be liable for the NI thats missed.

I know of cases where they have chased self employed people if they haven't paid, so Iam presuming they would chase anyone.

Milarky · 19 September 2005 at 1:55PM

And there would also be employer's NI to collect in that case also. Contacting the employer at this stage about it would assist both you and them to sort out the mess..

CIS · 19 September 2005 at 5:22PM

Another thing to be aware of, if you are required to pay back the NI and you dont, they have the ability to force payment of money owed and then disqualify the NI thats paid late from the calculatiosn of any benfits.

This happens with a lot of SE who dont pay when its due, are chased, forced to pay and then wonder why those yrs are disqualified when they come to claim their pension.

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