Inland Revenue Letter For Student

Lady_K

Are students exempt from national insurance contributions? Do they get them paid for? As my daughter has recieved a letter from the inland revenue saying she didn't pay enough towards her pension during year april 2003-2004 but that the payments are voluntary. Heck is there anything else that students find themselves having to pay for!!! If they are a student and having loans I doubt many could afford to pay it but its just another thing that adds on to the debt later on! What is the best thing to do? Shes been a student ever since leaving school doing A levels then university and she is still a student now on a nursing course. Shes had summer jobs and paid NI in those few weeks but thats it as her courses have been very full time and she couldnt work. It says theres a 46 week shortfall so thats £319.70. I don't know about the other years but shes 21 now.

Do you think she should be paying voluntary NI now as a student nurse? although I know she struggles like mad already I'm sure she can't afford it

Karnam

students still pay NI. i ignore the pensions letter as i simply dont have the money.

Savvy_Sue

There are some benefits which you can't get if you don't have the right number of NI conts. for particular years. And any years for which you don't have enough conts. doesn't count towards your final state pension.

So this is a standard letter sent to anyone who doesn't have the right no. of conts. for any particular year. The invitation is just that, an invitation. If your daughter plans to get pregnant soon after qualifying as a nurse (or even before) then it's worth looking into, because maternity is one of the benefits you need enough conts. for.

But other than that, it's probably not worth making the conts. at her age!

Oh, and karnam is right: students along with the rest of the working world have to pay NI if their earnings in a week or month are over a particular amount (I think it's something like £82 pw but you don't actually pay anything until your earnings are more than that). You don't get it back - unlike tax this isn't averaged out over the year.

So your daughter's obviously earned over the limit in a very few weeks, so she's got 'the letter'.

Karnam

considering how paltry the state pension will be by the time i retire (im 21 now) it doesnt seem entirely worthwhile to make these contributions if money is really really tight as a student.

Savvy_Sue

Karnam wrote:

considering how paltry the state pension will be by the time i retire (im 21 now) it doesnt seem entirely worthwhile to make these contributions if money is really really tight as a student.

You're probably right! However, I think there is a 'window' within which you can make these payments: I'd say it's always worth considering your circumstances when the letter arrives. I didn't 'make up' my conts. for the years I worked during uni vacations, but I DID make some voluntary conts. when I was self-employed and became pregnant. At that point, I was better off by making the conts. because I could then claim some maternity benefits. If I hadn't 'made up' those odd years, I'd have been less well off. Obviously that's only relevant for ladies, I doubt there's any reason at all for young men to make these payments. For mature students, it might be different.

Be grateful that the National Insurance people tell you that you CAN, if you want to, make the payments.

Lady_K

Thanx

Its useful to know regarding the maternity situation although that could be a while away yet but worth remembering

She did pay any tax she was supposed to and all her National Insurance contributions when she was in work during summer uni holidays as they were as normal deducted from her wages. There is a form on the back of the letter asking to fill in the dates of employment and if any contributions were made but surely they should already know that shouldn't they? as I know for certain she wont have kept record of the dates and I can't remember

Does this mean she will get another one next year for year 2004-2005 and so on until shes in work?

surfcat

Yes, she will get a letter every year.

She will need 39 years NI contribution (although by 2020 this will rise to 44 years to iron out the sexism) to qualify for a full basic state pension when she retires.

Lady_K

What happens if there are missing NI contributions then do you just get lower pension or do they make it up with income support as there is a certain amount the law says a person should live on isn't there?

She will probably pay it once shes left uni and in work anyway just to save any worry. I dont think she got one for the year 2002-2003 though even though she was at uni too so how come she hasnt had any before this she was 21 in july is it something to do with age? I'm just trying to work out how much she will owe in reality now and when she leaves uni

megsykins

I got one of these, in exact same position as your daughter, only mine only need about £150 to make it a qualifying year. Decided not to as our state pension will probably be stupidly small anyway (in 2055 or whenever i retire!) and from next year i'll be a grown-up with FT job and paying proper NI anyway.

Savvy_Sue

Lady_K wrote:

She did pay any tax she was supposed to and all her National Insurance contributions when she was in work during summer uni holidays as they were as normal deducted from her wages. There is a form on the back of the letter asking to fill in the dates of employment and if any contributions were made but surely they should already know that shouldn't they? as I know for certain she wont have kept record of the dates and I can't remember

Sometimes what's been deducted from the employee and the employer's contributions get 'given' to the wrong person, usually if the NI no wasn't recorded quite right. So asking for the info allows them to check that what they think the person has paid is the same as what the person thinks they have paid.

And she should get into the habit of keeping at least her P60 at the end of each year - that will show how much she's paid if not which weeks she worked!

Truly, this isn't money she 'owes' the government, unless she's planning to start a family straight after uni I doubt if anyone who knows what they're talking about would recommend her paying it!

CIS

What happens if there are missing NI contributions then do you just get lower pension or do they make it up with income support as there is a certain amount the law says a person should live on isn't there?

The state pension is apportioned depending on the number of years you have, between the minimum of 25% (11years) and the maximum (44 years).

If pension credit is still in exitence it will make up the difference, on todays rates for a single person, PC makes the £82 BSP up to about £109.

But , with a full BSP and your S2P/occupational pension, it is relatively easy to get an income above that which PC would provide..