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  • FIRST POST
    • maltazar
    • By maltazar 6th Sep 17, 5:20 PM
    • 2Posts
    • 0Thanks
    maltazar
    No pension, no NI
    • #1
    • 6th Sep 17, 5:20 PM
    No pension, no NI 6th Sep 17 at 5:20 PM
    I just found out that my new employer doesn't pay any pension.
    I also work only 12 hours a week, meaning I don't pay any NI.
    What is the best option? Pay the voluntary NI of £741 this year? Or paying the same ammount into private savings?
    I understand that it obviously depends on how you place the money, but in general, which would be best?

    thank you
Page 1
    • xylophone
    • By xylophone 6th Sep 17, 5:37 PM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    • #2
    • 6th Sep 17, 5:37 PM
    • #2
    • 6th Sep 17, 5:37 PM
    .
    You are not entitled to NI credits?

    http://www.litrg.org.uk/tax-guides/tax-basics/what-national-insurance

    How old are you and how much do you earn?

    Have you checked your state pension situation?


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

    Do you have any pensions from previous employments?

    https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

    Even if your employer does not have to automatically enrol you, you could still join the scheme but if you do not earn enough to pay tax, check on whether the scheme is "net pay" or "relief at source".
    • maltazar
    • By maltazar 6th Sep 17, 6:27 PM
    • 2 Posts
    • 0 Thanks
    maltazar
    • #3
    • 6th Sep 17, 6:27 PM
    • #3
    • 6th Sep 17, 6:27 PM
    I'm not paying any since my salary is too low.
    I'm 33 and at the moment I would earn a bit over £5000 a year.

    I have pension from previous work and the state from Sweden, but it's going to be around £300 a month.
    • marlot
    • By marlot 6th Sep 17, 6:58 PM
    • 3,114 Posts
    • 2,257 Thanks
    marlot
    • #4
    • 6th Sep 17, 6:58 PM
    • #4
    • 6th Sep 17, 6:58 PM
    I'm not paying any since my salary is too low.
    I'm 33 and at the moment I would earn a bit over £5000 a year. ...
    Originally posted by maltazar
    If you could get a few additional hours from your employer, so you earn £5880 a year you don’t pay NI but get the benefits of paying

    https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

    Due to the way it works, all the £5880 has to be with the same employer.
    Last edited by marlot; 06-09-2017 at 7:01 PM.
    • molerat
    • By molerat 6th Sep 17, 7:10 PM
    • 17,314 Posts
    • 11,507 Thanks
    molerat
    • #5
    • 6th Sep 17, 7:10 PM
    • #5
    • 6th Sep 17, 7:10 PM
    If you could get a few additional hours from your employer, so you earn £5880 a year you don’t pay NI but get the benefits of paying

    https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

    Due to the way it works, all the £5880 has to be with the same employer.
    Originally posted by marlot
    But each pay period that contributes to the £5876 must be over the LEL so not as easy as it sounds, the extra would have to be very regular for it to work. The rules are more aimed at irregular workers earning larger amounts.
    Last edited by molerat; 06-09-2017 at 7:27 PM.
    www.helpforheroes.org.uk/donations.html
    • greenglide
    • By greenglide 7th Sep 17, 3:33 PM
    • 2,895 Posts
    • 1,867 Thanks
    greenglide
    • #6
    • 7th Sep 17, 3:33 PM
    • #6
    • 7th Sep 17, 3:33 PM
    No.

    The requirement is that the earnings for the year, for that employment, is over £5,880.

    It can vary during the year and it is quite possible to get a qualifying year and pay not NI if each pay period is below the earnings threshold.

    Although HMRC now get individual payment details this is quite recent and is not used to calculate NI qualification.
    • Esox
    • By Esox 8th Sep 17, 7:32 AM
    • 12 Posts
    • 11 Thanks
    Esox
    • #7
    • 8th Sep 17, 7:32 AM
    • #7
    • 8th Sep 17, 7:32 AM
    No.

    The requirement is that the earnings for the year, for that employment, is over £5,880.

    It can vary during the year and it is quite possible to get a qualifying year and pay not NI if each pay period is below the earnings threshold.

    Although HMRC now get individual payment details this is quite recent and is not used to calculate NI qualification.
    Originally posted by greenglide
    Hi, how does that work if you are weekly paid?

    For example, I have exceeded the Lower Earnings Limit threshold (£113) for only 14 of the 23 PAYE weeks that have so far elapsed this FY (17/18).

    Although my yearly earnings are likely to exceed the quoted annual figure (£5,880).

    All with same employer.
    Last edited by Esox; 08-09-2017 at 7:43 AM.
    • xylophone
    • By xylophone 8th Sep 17, 9:23 AM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    • #8
    • 8th Sep 17, 9:23 AM
    • #8
    • 8th Sep 17, 9:23 AM
    Hi, how does that work if you are weekly paid?
    http://www.litrg.org.uk/tax-guides/employed/what-national-insurance-do-i-pay-employee

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/607128/your-state-pension-explained-apr-2017.pdf
    • Esox
    • By Esox 8th Sep 17, 10:12 AM
    • 12 Posts
    • 11 Thanks
    Esox
    • #9
    • 8th Sep 17, 10:12 AM
    • #9
    • 8th Sep 17, 10:12 AM
    Thanks (Xylophone) but I was thinking more from a nSP point of view.

    Is the HMRC system so sophisticated that it can look at individual weeks when determining NICs required/paid towards nSP entitlement (or only the annual amount)?

    For example, as a weekly wage earner, assuming you have exceeded the LEL threshold for only 14 out of 52 weeks, does this get you entitlement to 14/52 of an annual nSP NIC requirement (i.e., you then have to pay HMRC 38/52 x £700(?) to gain a full year's worth of nSP entitlement)?

    It may be the case that HMRC haven't got the wherewithal to look much beyond the £5,880 annual earnings figure.
    Last edited by Esox; 08-09-2017 at 10:23 AM.
    • xylophone
    • By xylophone 8th Sep 17, 11:51 AM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    http://forums.moneysavingexpert.com/showthread.php?t=5586387
    • greenglide
    • By greenglide 8th Sep 17, 7:54 PM
    • 2,895 Posts
    • 1,867 Thanks
    greenglide
    It may be the case that HMRC haven't got the wherewithal to look much beyond the £5,880 annual earnings figure.
    HMRC take the figures they are supplied with at the year end, basically what is on the P60.

    If your earnings are over £5,880 (ignoring if you earn over the upper earnings limit in a pay period) then it is a qualifying year.

    HMRC cannot do anything else as that is the rules laid down in legislation.
    • Esox
    • By Esox 9th Sep 17, 7:45 PM
    • 12 Posts
    • 11 Thanks
    Esox
    HMRC take the figures they are supplied with at the year end, basically what is on the P60.

    If your earnings are over £5,880 (ignoring if you earn over the upper earnings limit in a pay period) then it is a qualifying year.

    HMRC cannot do anything else as that is the rules laid down in legislation.
    Originally posted by greenglide
    Interesting but, in that case, why do they publish weekly/monthly threshold figures (when only an annual figure matters)?

    I think this issue has been raised before. Say someone earns £6k in week one of the FY and doesn't work again, will that person gets a full year's worth of nSP entitlement?

    Can't really find any official links that address this issue.
    Last edited by Esox; 09-09-2017 at 7:51 PM.
    • greenglide
    • By greenglide 9th Sep 17, 8:53 PM
    • 2,895 Posts
    • 1,867 Thanks
    greenglide
    Earnings above the upper earnings limit in any pay period are not counted, but £6,000 in one week / month would not work. Apart from that it is very flexible. This was explained in xylophone's link in post 10 - http://forums.moneysavingexpert.com/showthread.php?t=5586387 .

    The amounts are given in weekly / monthly / annual values to enable people to calculate the NI that should be paid.

    It was a truly weekly payment up to 1975 as NI was up till then paid by the weekly NI stamp. I think you had to have 50 stamps (including credits) per year otherwise you would have a shortfall. From 1975 the current variable system was introduced.
    • Esox
    • By Esox 10th Sep 17, 8:21 AM
    • 12 Posts
    • 11 Thanks
    Esox
    Earnings above the upper earnings limit in any pay period are not counted, but £6,000 in one week / month would not work. Apart from that it is very flexible. This was explained in xylophone's link in post 10 - .
    ...snip
    Originally posted by greenglide
    Cheers for the link, the nearest thing I can find to cover this issue is from a third party website for students.

    A ‘qualifying year’ sounds as though you might need to have a perfect 52 weeks of working for it to count. In fact, for ‘Class 1’ NICs, any tax year where you receive a minimum amount of earnings or credits (which you receive for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2017/18 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £113 (this amount is known as the Lower Earnings Limit) – total £5,876. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.
    So does that mean you could earn £5,876 over the FY but still have an impaired annual NIC record (as there could be some weeks where you earned below the LEL or even nothing at all)?
    Last edited by Esox; 10-09-2017 at 8:25 AM.
    • xylophone
    • By xylophone 10th Sep 17, 1:14 PM
    • 23,395 Posts
    • 13,596 Thanks
    xylophone
    https://www.saga.co.uk/magazine/money/personal-finance/tax/national-insurance-contributions

    Above dated 2014 See https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2017-18/tax-and-tax-credit-rates-and-thresholds-for-2017-18
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