Students and national insurance?

neet87

Hello, Was hoping someone could help clarify this for me...

Last week I received a letter from HM Revenues and Customs saying that for the tax year 2006-2007 I didnt contribute enough and said my options are paying £370 to them for this year (which I have up to April 2013 to do but it will cost more if I leave it after April 2009) or not to pay which would mean it would not count towards my basic state pension.

I was in full time sixth form education until July of 2006. Over the summer I did some temp work before starting university and again during the winter break. I explained this over the 'phone and the lady said because I turned 19 during September 2006, I would not receive any credits for the entire tax year despite being at sixth form still. She said that despite technically being unemployed (the temp work was very irregular), because I didnt claim benefits I would not get any tax credits.

Was the person I spoke to correct about this? And if I do not pay, what happens to the small amount of NI I did pay during temp work?

I would be grateful of any help!

Lokolo

Age doesn't matter in terms of tax. You pay tax whatever age you are if you earn enough. Simple as. They've given you the choices, your choice what to do next.

NI is tax on a weekly basis. If you earn over £100 (approx.) a week you pay it. Its not done on a yearly basis unlike income tax.

neet87

They do actually give you tax credits while you are 16, 17 and 18 and in full time education. If I had turned 18 after April 2006 (which other people in my year would have done) I would have received tax credits for this year.

Oh well, I just wanted to check my options before paying up as I have found government instituitions have a knack of only telling you part of the story sometimes.... I had better start saving!

Oldernotwiser

I wouldn't bother quite frankly; you only need 30 years of contributions at the moment for a full pension so you're unlikely not to hit this target through your working life. It's only since more people had to work whilst at university that people have been paying any NI at all during this time; do something more useful with your money.

stargazeypie

I would definitely listen to oldernotwiser.

I got a letter very similar to this from HRMC a couple of years ago, suggesting that I paid a top up for a particular tax year. As I was 20 or so at the time and it informed me that I HAD already qualified for some 5 years and knowing I would only need 30 in total I decided that it would probably be OK if I just kept my cash. So I ignored that letter.

About 6 months ago I received another letter. HMRC had mysteriously found some more of my NI contributions for that tax year and I was in fact over the threshold.

I assume I would have got a rebate when this came to light. Probably. Eventually.

famous.last.words

They must be sending them out in bulk, i got one yesterday asking me to pay £120 saying i hadnt made enough NI contributions but then i didnt get one last year and ive worked more this year than last! Very confused. Going to take it to my employer next week and ask him. If he has anything helpful to add ill let you know.

Blacksheep1979

Totally agree with Oldernotwiser - there's also the fact that the state pension is getting smaller and smaller and will probably be totally worthless by the time you claim it